Services sector activity jumps to highest level in over eight years
The ISM non-Manufacturing Index showed growth in the service sector accelerated to the highest level since December 2005, rising to 58.7 in July, from 56.0 in June, and above the 56.5 level that economists surveyed by Bloomberg had expected, with a reading above 50 denoting expansion. The report is generally considered a measure of economic strength in the service sector and is the companion to the ISM Manufacturing Index, which showed growth accelerated more than expected for last month. Activity in the non-manufacturing sector was bolstered by new orders and production both growing to 64.9 and 62.4, respectively, while prices dipped 0.3 points to 60.9. Moreover, employment rose 1.6 points to 56.0. 16 of the 17 industries reported growth in July, while the lone industry that reported contraction was utilities. Finally, comments from the sector indicated that "stabilization and/or improving market conditions have positively affected the majority of the respective industries and businesses."
Factory orders rose 1.1% month-over-month (m/m) in June, compared to the 0.6% gain that was expected by economists, while May's 0.5% decrease was revised lower to a 0.6% decline. Meanwhile, June durable goods orders—reported two weeks ago—were revised to a 1.7% gain, from the 0.7% rise initially reported.
The final Markit U.S. Composite PMI Index—a gauge of business activity in both the services and manufacturing sectors—was revised slightly lower to 60.6 for July, from the 60.9 in the preliminary report, and just shy of the 61.0 level in June. The release is independent and differs from the ISM's business activity reports, as it has less historic value and Markit weights its index components differently.
The recent downside pressure on the U.S. equity markets is persisting in afternoon action, with geopolitical concerns lingering, while some mostly favorable earnings and economic data appear to be fostering uncertainty regarding the timing of the Fed's first interest rate hike. Domestic services sector growth jumped to the highest rate in over eight years, while factory orders rose much more than anticipated. Meanwhile, CVS Caremark and Coach topped analysts' earnings expectations, while Target lowered its profit forecast and AIG offered some cautious commentary regarding its property and casualty unit. Treasuries are lower, along with gold and crude oil prices, while the U.S. dollar is higher. Overseas, European equities finished mostly higher following some upbeat earnings and economic data.
Source: Schwab
The ISM non-Manufacturing Index showed growth in the service sector accelerated to the highest level since December 2005, rising to 58.7 in July, from 56.0 in June, and above the 56.5 level that economists surveyed by Bloomberg had expected, with a reading above 50 denoting expansion. The report is generally considered a measure of economic strength in the service sector and is the companion to the ISM Manufacturing Index, which showed growth accelerated more than expected for last month. Activity in the non-manufacturing sector was bolstered by new orders and production both growing to 64.9 and 62.4, respectively, while prices dipped 0.3 points to 60.9. Moreover, employment rose 1.6 points to 56.0. 16 of the 17 industries reported growth in July, while the lone industry that reported contraction was utilities. Finally, comments from the sector indicated that "stabilization and/or improving market conditions have positively affected the majority of the respective industries and businesses."
Factory orders rose 1.1% month-over-month (m/m) in June, compared to the 0.6% gain that was expected by economists, while May's 0.5% decrease was revised lower to a 0.6% decline. Meanwhile, June durable goods orders—reported two weeks ago—were revised to a 1.7% gain, from the 0.7% rise initially reported.
The final Markit U.S. Composite PMI Index—a gauge of business activity in both the services and manufacturing sectors—was revised slightly lower to 60.6 for July, from the 60.9 in the preliminary report, and just shy of the 61.0 level in June. The release is independent and differs from the ISM's business activity reports, as it has less historic value and Markit weights its index components differently.
The recent downside pressure on the U.S. equity markets is persisting in afternoon action, with geopolitical concerns lingering, while some mostly favorable earnings and economic data appear to be fostering uncertainty regarding the timing of the Fed's first interest rate hike. Domestic services sector growth jumped to the highest rate in over eight years, while factory orders rose much more than anticipated. Meanwhile, CVS Caremark and Coach topped analysts' earnings expectations, while Target lowered its profit forecast and AIG offered some cautious commentary regarding its property and casualty unit. Treasuries are lower, along with gold and crude oil prices, while the U.S. dollar is higher. Overseas, European equities finished mostly higher following some upbeat earnings and economic data.
Source: Schwab
