Macro November 05, 2018 / 03:15 pm UTC

Implications of US Oct ISM non-manufacturing - 2 straight months above 60

By David Sloan

ISM non-manufacturing still very strong, if correcting lower.

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Oct's ISM non-manufacturing index of 60.3 may be down from Sep's 61.6 that was the highest since Aug 1997. However it is still very strong. The series, which started in Jul of 1997, has never seen 2 straight months above 60 before.

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Business activity at 62.5 and employment at 59.7 slipped back from very strong Sep readings of 65.2 and 62.4 respectively, but the employment data is still consistent with a strong payroll (in fact recently very strong ISM non-manufacturing indices have led payroll strength).

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New orders at 61.5 versus 61.6 in Sep held up well if below Jun's recent high of 63.2. The fourth and final contributor to the composite, delivery times, actually increased to 57.5 from 57.0.

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Prices paid do not contribute to the composite and at 61.7 slipped back from Sep's higher 64.2, with movements in oil appearing consistent with recent volatility.

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