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ISM Non-Mfg Index  
Released On 1/6/2010 10:00:00 AM For Dec, 2009
PriorConsensusConsensus RangeActual
Composite Index - Level48.7 50.4 48.3  to 51.0 50.1 

Highlights
Output and employment are improving but new orders are slowing down, in mixed results for the ISM's non-manufacturing report for December. The headline composite rose 1.4 points to 50.1, a level indicating very little month-to-month change in overall activity for the bulk of the economy. New orders, the life blood of business, did show a month-to-month increase at 52.1 but the slowest increase over the last four months. In a reflection of the prior gains in orders, the business activity component, which can roughly be described as a production reading, rose more than 4 points to 53.7. With production increasing, businesses are relying more on their labor force as the employment index, though still below 50 to indicate month-to-month contraction, rose nearly 2-1/2 points to 44.0 in a result that will firm expectations for strength in Friday's payroll report. Equities and commodities moved lower in immediate reaction to the results.

Recent History Of This Indicator
The composite index from the ISM non-manufacturing survey weakened in November, declining nearly 2 points to a sub-50 and sub-par 48.7. This composite had been marginally positive in September and October. However, the November dip appears to be temporary as the new orders index remained clearly above break-even, coming in at 55.1. Also, the Chicago PMI hints at a rebound in the ISM non-manufacturing index. However, the Chicago index is based on both non-manufacturing and manufacturing company survey responses.

Definition
The Institute For Supply Management surveys more than 375 firms from numerous sectors across the United States for its non-manufacturing index. This index covers services, construction, mining, agriculture, forestry, and fishing and hunting. The non-manufacturing composite index has four equally weighted components: business activity (closely related to a production index), new orders, employment, and supplier deliveries (also known as vendor performance). The first three components are seasonally adjusted but the supplier deliveries index does not have statistically significant seasonality and is not adjusted. For the composite index, a reading above 50 percent indicates that the non-manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. The supplier deliveries component index requires extra explanation. A reading above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries. However, slower deliveries are a plus for the economy -- indicating demand is up and vendors are not able to fill orders as quickly.  Why Investors Care
 
[Chart]
The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey.
Data Source: Haver Analytics
 
 

2010 Release Schedule
Released On: 1/62/33/34/55/56/37/68/49/310/511/312/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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