The ISM Non-Manufacturing Index was released today surpassed projected readings with a figure of 60.7 for November, higher than the 59.7 forecast by analysts. The reading from the Institute of Supply Management is strong despite tariffs and concerns over the sustainability of growth in employment.
Key Takeaways
- The New Orders Index came in one percentage point higher than October’s reading of 61.5, showing 62.5 percent in November.
- There was a 1.3 percentage point drop in the Employment Index which read 59.7 in October and 58.4 in November.
- Meanwhile the Prices Index saw strong growth with a 2.6 percentage point increase in November with a reading of 64.3 compared to 61.7 the month before, making this the 33rd month in a row that prices have increased.
- While there are concerns over tariffs and employment, respondents were largely positive regarding business conditions and the US economy overall.
The report follows data that shows the creation of jobs in the US has slowed down over the last month with 179,000 jobs created, lower than expected. Meanwhile, manufacturing activity increased last month from 57.7 in October to 59.3 in November.
A reading above 50 indicates that the sector is expanding, while a reading below 50 indicates a contraction.
Expert Outlook
“The non-manufacturing sector continued to reflect strong growth in November. However, concerns persist about employment resources and the impact of tariffs,” said Anthony Nieves, ISM chair, in a statement. Notwithstanding those concerns, “respondents remain positive about current business conditions and the direction of the economy.”
Market Reaction
Equities took a hit today with the Dow Jones Industrial Average down almost 500 points, while gold saw gains for the same reasons - market fear over a potential economic slowdown.
Spot gold is up 0.04% on the day and currently trading at $1,237.58. Weaker employment figures leading to concern over the US economy could be seen as negative for the US dollar which in turn causes investors to look to gold as a safe haven in an uncertain market.
Gold Price Chart
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