US ISM Service Index slows unexpectedly

ISM Non-Mfg Index

Released On 1/6/2014 10:00:00 AM For Dec, 2013 Prior Consensus Consensus Range Actual Composite Index - Level 53.9  54.8  53.9  to 55.1  53.0

Highlights New orders moved suddenly into reverse for ISM's non-manufacturing sample, pulling down the index by 9 tenths to 53.0. New orders, the leading indicator in this report, fell to 49.4 from 56.4 in November. This is the first sub-50 reading for new orders, which had been especially strong through much of the second half of last year, since July 2009. But coincidental and lagging indications are positive including a steady reading for business activity and a big bounce back for employment, up 3.3 points to 55.8. Other readings include a second straight contraction for backlog orders, a slight rise for input price pressures, and a slowing in export orders. Today's employment reading may lift expectations for Friday's employment report but otherwise the report hints at an early 2014 slowdown for the economy.

Market Consensus before announcement The composite index from the ISM non-manufacturing survey indicated a slowing in this sector, posting in November at 59.3, compared to 55.4 the prior month. Still, growth is positive. But monthly growth in new orders remained very solid, at 56.4 for only a small dip from October. Strength in orders points to strength in general activity in the months ahead.

Source: Bloomberg