Forex - Implications of US Jun ISM non-manufacturing - Weaker rather than weak


 14:20 (GMT) 03 Jul

  [Economic Data]

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ISM non-manufacturing slows though not by enough to imply economic weakness.

Implications of US Jun ISM non-manufacturing - Weaker rather than weak (0101-MKGM-C01)

Jun's ISM non-manufacturing index of 55.1 more than fully reversed May's unexpected improvement to 56.9 to fall to its lowest level since Jul 2017. This resumes a slowing in trend from what were very strong levels above 60 in late 2018, but a level of 55.1 is still consistent with a respectable pace of GDP growth.

Implications of US Jun ISM non-manufacturing - Weaker rather than weak (0101-MKGM-C02)

New orders at 55.8 are the weakest since Dec 2017 but business activity at 58.2 was weaker as recently as Mar. Employment at 55.0 is above Apr's 53.7 if down from what was a very strong 58.5 in May, and not signaling weakness in payrolls (though we still expect a below trend 135k rise). Seasonal adjustments acted as a restraint on the employment index. The final contributor to the composite, delivery times, increased to 51.5 from May's weak 49.5.

Implications of US Jun ISM non-manufacturing - Weaker rather than weak (0101-MKGM-C04)

Prices paid got some support from seasonal adjustments, rising to 58.9 from 55.4, to reach their highest level since Jan. This contrasts weak prices paid data in the ISM manufacturing survey (which is not seasonally adjusted). In both ISM surveys, prices paid do not contribute to the composite.

Implications of US Jun ISM non-manufacturing - Weaker rather than weak (0101-MKGM-C03)

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