The ISM non-manufacturing index came in at 59.0 in August. After hitting a decade-high of 60.3 in July, financial markets were braced for a bigger giveback. The service sector is expanding rapidly.
Service Sector Less Impacted by Strong U.S. Dollar
- Earlier this week we saw the export component of the ISM manufacturing index slip to a multi-year low. That export measure from the non-manufacturing side also slipped in August, but at 52.0 it remains in expansion territory. Goods exports often exhibit greater price sensitivity than service exports, so it appears that the strong dollar is weighing more heavily on manufacturers than it is on the service sector.
Generally Positive, Hiring Slightly Less Stellar
- All subcomponents were in expansion and industry sector comments were uniformly strong. “Trending toward a positive year-end” said a respondent in the finance/insurance sector.
- The one potential negative, on the “eve” of the employment report, is that job momentum appears to have slowed somewhat. The employment component slipped to a still-strong 56.0 from an even stronger 59.6 previously.
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