ISM Non-Manufacturing Signals Growth Remains Solid

The ISM non-manufacturing index edged down a tick in January to a still-solid 56.5. Taken together with the manufacturing index, the ISM readings indicate the economy continues to gain some momentum. 

Steady Gains

• Activity outside the manufacturing sector continued to expand at a solid pace in January with the ISM non-manufacturing index coming in little changed at 56.5.
• Among components, the indices on current activity and new orders moved down slightly but remained above their respective six-month averages.

Supplier delivery times, on the other hand, lengthened at a faster pace. 

• Employment and Prices Rising The employment component moved up two points to 54.7, consistent with the stronger pace of hiring reported earlier this morning in the January employment report.
• Price pressures mounted further last month, with the prices paid index rising at the fastest rate since the spring of 2014.
• A weighted average of both ISMs shows economic activity has strengthened noticeably since the middle of 2016.