RAW DATA: School of thought Non-Manufacturing Index Falls to Second Lowest Historic Level
Headline Numbers:
Total Institute for Supply Management Non-Manufacturing Index: 41.9, down 12.5 from December’s 53.9 (Consensus: 52.5);
Employ Index: 43.9, down 7.9 from December’s 52.1 (No consensus);
Prices Paid Index: 70.7, down 0.8 from December’s 71.5 (No consensus);
New Orders Index: 43.5, down 10.4 from December’s 53.9 (No consensus);
Inventories Index: 44.5, down 6.0 from December’s 50.5 (No consensus).
Trend:
Total ISM non-manufacturing index swaybacked to its last level since October 2001 (40.5) postdating the September 11 terrorist attacks. The indicant is at its second last levels since it started in July 1997;
The total index has gone down for four of the last five calendar months and is belowed 50 (signalling contraction) for the first time since March 2003;
The 12.5 decline was the usurious since the indicant began;
Employ sub-index dropped for only the fifth time in the last seven calendar months, and is bolted down 7.8 points twelvemonth over twelvemonth; it has existed down year-year for six of the last seven calendar months and is at its place level February 2002 (too 43.9);
The costs paid sub-index improved (fell) for the second calendar month in a run after an outsize (7.6 point) increase in November. Year-over-year, the costs paid index is up 15.5 points;
New Orders sub-index was the watery since October 2001 (41.3) with the outrageous month-month decline since the index number began in July 1997;
Inventories index cut down to its last level since November 2002 (44.0).
What it way: The out of the blue weak ISM non-manufacturing index serves to back up - if non corroborate - corner concerns. The non-manufacturing gauge index is an immature version of ISM’s manufacture index and doesn’t have the same track record. That expressed, manufacturing is a decreasing share of the nation’s economic system making the non-manufacturing index more important. Of particular concern is the blended employment index (leaden) which cut down to 44.4, its last level since February 2002 that reflected lingering personal effects of the 2001 corner. Indeed, paysheet jobs dropped 147,000 in February 2002. The blended total index dropped to 43.3, besides the place level since October 2001 and the second watery level in the chronicle of the two indexes.An contiguous read of the index–coupled with the fabrication gauge - advises the Federal Open Market Committee will likely move sharply when it meets next on March 18, but there are respective major information reports earlier that group meeting, including two ISM reports for February.
Mark Lieberman is the senior economic expert for the Fox Business Network. Prior to connexion FOX, he functioned as first frailty president at Washington Mutual, where he was director of economical analysis and research. Earlier that, he functioned as senior frailty president at Dime Savings Bank of New York (that was posterior acquired by Washington Mutual), where he specialised in credit and risk direction. He has a grade in Economics from the Wharton School of the University of Pennsylvania.