The ISM non-manufacturing index moderated a touch in June, but at 56.0 still signals solid growth in the economy. Encouragingly, the new orders and employment indices rose. Prices continue to rise at a fast clip.
One More Reason Not to Fret About Q1 GDP
- The ISM non-manufacturing index edged 0.3 points lower in June but, at 56.0, remains firmly in expansion territory. Over the past three months, the index has averaged 55.8 and provides another indication that first quarter GDP was an aberration and not indicative of the underlying trend in growth.
- Activity should remain solid over the near term with the new orders index rising to 61.2, the highest reading since Jan. 2011.
Some Subtle Encouragement for the Housing Sector
- Of the 14 industries reporting growth, the construction and real estate, rental & leasing industries reported the most improvement and suggest that the housing sector is picking up.
- Price pressures continue to rise with the prices-paid index still above 60 in June. Reports of rising prices were widespread, with 16 of 17 industries reporting an increase. That is not deterring companies from hiring; the employment index rose 2.0 points.
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