ISM Non-Manufacturing PMI Outperforms Expectations

The Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers’ Index (PMI) is a key indicator of economic health in the non-manufacturing sector, and it has recently outperformed expectations.

The actual ISM Non-Manufacturing PMI figure is 54.1, surpassing the forecast of 53.5. This indicates a stronger expansion in the non-manufacturing sector than initially projected.

The ISM Non-Manufacturing PMI is a composite index based on four key indicators, each given equal weight: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted), and Supplier Deliveries.

Comparing to the previous index figure of 52.1, the current 54.1 shows a significant improvement, suggesting a solid growth trajectory in the non-manufacturing sector. A reading above 50 percent is seen as positive, indicating expansion; conversely, readings below 50 percent signify contraction.

Data for the ISM Non-Manufacturing PMI is gathered from responses by over 370 purchasing and supply executives across more than 62 industries, spanning nine divisions from the Standard Industrial Classification (SIC) categories. Their contributions to the Gross Domestic Product (GDP) are considered in the index.

The higher-than-expected PMI reading serves as a bullish signal for the USD, indicating a positive outlook for the US economy. This strong expansion could lead to increased employment and business activity, thereby fostering economic growth.

In conclusion, the latest ISM Non-Manufacturing PMI data suggests a promising outlook for the health of the non-manufacturing sector. If this upward trend continues, it could significantly contribute to the overall growth of the US economy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.