• 15 hours The Cannabis Culling Has Wall Street Disappointed
  • 21 hours Vigilante Offers $100,000 Bounty To Hack Banks
  • 2 days The Dairy Industry Is Dying
  • 2 days The Most Impressive Electric Vehicle Of The Year
  • 3 days Gold Miners Are Having A Stellar Second Half
  • 4 days How 3D Printing Is Turning Each And Every Industry On Its Head
  • 4 days Is The $3.5 Trillion Healthcare Industry About To Get Much More Transparent?
  • 5 days Gamblers Are Betting Big On Trump’s Impeachment
  • 5 days Even Banks Can't Answer Aramco's Trillion Dollar Question
  • 6 days Will Bezos Buy The Seattle Seahawks?
  • 6 days 6 Tech Trends Transforming The Travel Industry
  • 7 days Ousted Uber CEO Cashes Out $500 Million In Stock
  • 7 days Trump Prepares For Another Key Tariff Decision
  • 7 days The Free Money Bubble Is About To Burst
  • 8 days The Crushing Reality Of Poverty In America
  • 8 days Should You Buy Into The World’s Largest IPO?
  • 8 days The Infinite Possibilities Of Cosmic Energy
  • 9 days Analysts Link Walking To Economic Growth
  • 10 days Will Japan Turn Its Back On The Aramco IPO?
  • 11 days Global Debt Soars To $188 Trillion
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Non-Manufacturing ISM Cracks Appear: 8 of 18 Industries in Contraction

NMI Cracks Appear

The non-manufacturing (services) ISM is still growing but prices and new export orders both plunged into contraction. Moreover, 8 out of 18 industries fell into outright contraction.

The Econoday Consensus Estimate was for a slight decline to 55.5 from 55.8 but once again economists were on the optimistic side. ISM reports a reading dip to 53.5. While still growing, this report portends significant, and growing weakness.

Monthly growth is slowing noticeably in ISM's non-manufacturing sample. The composite index for January fell a sharp 2.3 points to 53.5 from December's revised 55.8 which is 2 points below the Econoday consensus. Slowing is most apparent in output (as measured by the business activity component) with employment growth also slowing sharply, to 52.1 for a 4.2 point dip. However new orders, at 56.5, remain solidly above breakeven 50 though here to there is slowing, from December's 58.9. Supplier deliveries, the fourth component of the composite, slowed in the month in a sign of congestion in the supply chain in what is an offsetting positive for the month.

Weakness is signaled by both contraction in import orders, which points to business caution among U.S. businesses, and also for export orders, the result of weak foreign markets and the negative effects of the strong dollar. Input prices, which have been subdued, fell in the month.

Through much of last year, this report was among the most resilient, consistently pointing to steady strength that for the most part proved correct. Today's declines, along with the dip in the PMI services report released earlier this morning, unfortunately hint at soft growth for the first quarter while this report's employment index, hitting its lowest point since January last year, points to modest disappointment for Friday's employment report.

Let's dive into the NMI Report for more details.


Non-Manufacturing NMI January vs. December

Non-Manufacturing NMI January vs. December


Growing Industries

  1. Finance & Insurance
  2. Real Estate, Rental & Leasing
  3. Utilities
  4. Retail Trade
  5. Information
  6. Construction
  7. Agriculture, Forestry, Fishing & Hunting
  8. Health Care & Social Assistance
  9. Management of Companies & Support Services
  10. Public Administration


Contracting Industries

  1. Mining
  2. Educational Services
  3. Wholesale Trade
  4. Other Services
  5. Arts, Entertainment & Recreation
  6. Accommodation & Food Services
  7. Transportation & Warehousing
  8. Professional, Scientific & Technical Services

 

Entertainment, as well as accommodation and food services are now in contraction. Food service has been a key provider of jobs.

 

Back to homepage

Leave a comment

Leave a comment