Commentary June 23, 2020 / 06:11 pm UTC

Preview: Due July 6 - U.S. June ISM Non-Manufacturing Index

By David Sloan

We expect June’s ISM non-manufacturing index to increase to 49.5 from 45.4, a similar improvement to that seen in May from the April low of 41.8.

A 49.5 print would keep the ISM non-manufacturing index, as tends to be the case, above the Markit services PMI of 46.7, but below the neutral 50. The Philly and Richmond Fed’s services indices were still negative in June, with the former getting close to neutral, but the latter less so.

We expect business activity to lead the ISM non-manufacturing improvement, rising to 50.0 from 41.0 with help from supportive seasonal adjustments. We also expect new orders to rise to 48.0 from 41.9 and employment to 45.0 from 31.8. Delivery times, however, are likely to slow from May’s still-inflated mark of 67.0 (we see this sub-index coming in at 55.0 on the month). While prices paid do not contribute to the composite, we expect gasoline to lift the index to a 5-month high of 57.5 from 55.6 in May. 

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I, David Sloan, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.