U.S. September ISM Services - Back to neutral, prices still firm
September’s ISM services index has slipped back to a neutral 50.0 after a bounce to 52.0 in August from July’s near neutral 50.1 . We had suspected that August data had been flattered by seasonal adjustments but seasonal adjustments do not fully explain the recent moves.
The components of the composite that saw the toughest seasonal adjustments in September, business activity and new orders, saw the sharpest falls, the former to 49.9 from 55.0 and the latter to 50.4 from 56.0.
The other two components of the composite actually increased, employment to a still subdued 47.2 from 46.5 and deliveries, which are not seasonally adjusted, to 52.6 from, 50.3.
Prices paid do not contribute to the composite and at 69.4 from 69.2 remain firm near July’s 69.9 level that was the highest since October 2022.
The weakness of the ISM services index contrasts a healthy S and P services PMI of 54.2 that was revised up from 53.9. However the ISM data is generally consistent with a subdued set of monthly regional Fed service sector surveys.
