Wednesday, June 5, 2013

ISM Non-Manufacturing Improved in May

The ISM non-manufacturing index increased to 53.7 in May from 51.3 in April. The gains don’t fully offset April’s cooling of the index and the composite index remains down 1.3 points on a year-ago basis. The non-manufacturing index has now remained above 50 – indicating industry expansion – for 41 consecutive months. Services continue to outperform the manufacturing sector, which declined below 50 to 49.0 this past month.

Details of the report are mixed. Business output and new orders improved while exports declined. Business output increased 1.5 points to 56.5 in May. New orders also grew to 56.0, a positive sign for future production. Inventories posted no index change, but at 51.5, is above the expansionary threshold and could aid GDP growth in the second quarter. Exports noticeably declined 3.5 points to 50.0.

Although unemployment dropped to 50.1, the index remains in expansionary territory.

Read the ISM release.

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