The business activity (54.8) and orders (55) suggest a V shaped recovery is indeed on the way while the employment index at 48.6 provides for great profits opportunities. This may not be good news for your neighbor that is unemployed, but it should help corporate profits and hence stock prices. After all, if your activity/orders increase but you have less people/costs your profits should soar.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Worldwide. "The NMI (Non-Manufacturing Index) registered 53 percent in February, 2.5 percentage points higher than the seasonally adjusted 50.5 percent registered in January, indicating growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 2.6 percentage points to 54.8 percent, reflecting growth for the third consecutive month. The New Orders Index increased 0.3 percentage point to 55 percent, and the Employment Index increased 4 percentage points to 48.6 percent. The Prices Index decreased 0.8 percentage point to 60.4 percent in February, indicating an increase in prices paid from January. According to the NMI, nine non-manufacturing industries reported growth in February. Respondents' comments vary by industry and company about business conditions."
Back on the V shaped recovery, Atlanta Fed President Fred Lockart was out today talking about a not so V shaped recovery. We have to wonder what he's looking at. Looking at the graph made by First Trust it sure looks like a V shaped recovery to us. The ISM number is likely to continue much higher then 53 as well.