ISM’s Non-Manufacturing Index Rises Most In Year
The latest data from the Institute for Supply Management shows the US services sector is growing. ISM’s non-manufacturing index increased to 57.2 in November from 54.8 in October, which exceeded forecasts. Media reporting largely characterized the report as adding strength to last month’s solid manufacturing report, which, taken together, point to a healthy economy leading up to the Federal Reserve’s December meeting. Reuters characterized the report as “bullish,” saying sector activity “hit a one-year high in November, with a surge in production boosting hiring, further evidence of strength in the economy that clears the way for the Federal Reserve to raise interest rates next week.” BMO Capital Markets Senior Economist Robert Kavcic is quoted as saying, “The U.S. economy looks solid heading into year-end and, backed by a tightening labor market, the Fed is set to raise rates next week.” Services industries reported “a 4 percentage point surge in production last month,” while a measure of services sector employment “soared 5.1 percentage points to a 13-month high.” The Wall Street Journal said that the report is another sign of solid growth for the economy after a weak first half of the year. The Journal added that, together with last week’s strong manufacturing report, the economy likely is growing at a 3 percent annual pace in the last part of the year. According to Bloomberg News, ISM Non-manufacturing Survey Chairman Anthony Nieves said, “This last quarter is having the year finish up pretty strong. … I don’t project that December is going to be much different.”
What This Means For Small Businesses
Small businesses are looking for signals that the US economy is improving. Data showing growth in the US services sector is an indication that the overall economy may be picking up steam headed into 2017.
USA Today also covered the latest services sector data.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.