Wednesday, August 4, 2010

Stat of the Day: ISM Serives Rises in July

After some weak numbers for June, alot of the economic data for July is started to come in ahead of estimates. Clearly June was a pause because of the fears in the global economy due to the various issues repeated ad nausem. Now with just about all of the issues out of the way including news today that some 75% of the oil leaked in the Gulf of Mexico having been captured or evaporated, the economy can get back to its recovery.

Today the July ISM Services or non-Manufacturing report came in at a strong 54.3 up from the 53.8 in June and easily above estimates that expected a decline. The Business Activity index remained a robust 57.4 showing that growth is likely above the headline numbers that tend to be sentiment based. New Orders rose to 56 and Inventories and Prices Paid relaxed from levels that were too high last month.

All in all it was a very solid report and market is slowly coming to realize that we're likely headed towards a strong recovery in the 2H versus the double dip. As shown in the table below, Business Activity has consistently been above the headline ISM number. Its interesting to note how few businesses expect lower activity even though the prevailing 'noise' in the markets is for a double dip.



Business Activity
%
Higher
%
Same
%
Lower

Index
Jul 2010 27 57 16 57.4
Jun 2010 35 56 9 58.1
May 2010 38 53 9 61.1
Apr 2010 39 51 10 60.3

No comments: