Thursday 6 October 2005

ISM non-manufacturing index disappoints, other data more positive

US September data are throwing up a number of surprises.

Following the surprisingly strong ISM manufacturing index for September, the non-manufacturing index for the month has turned out surprisingly weak.

Reuters reports this and other news from the US.

The Institute for Supply Management's U.S. services index fell to 53.3 in September from 65.0, far below Wall Street's forecast of 61.0 and the lowest since April 2003... New orders, exports orders and employment in the services sector all fell in September... The services prices paid index was 81.4, the highest since the index was launched in 1997...

[O]utplacement firm Challenger Gray & Christmas said U.S. companies announced 71,836 layoffs in September, up marginally from 70,571 in August but 33 percent below a year ago and not as high as feared...

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended September 30 slipped 1.1 percent to 713.5, its lowest level since late May... The MBA's seasonally adjusted purchase mortgage index fell 1.9 percent. The index...was down for a third straight week to its lowest level since the last week of August.

Meanwhile, the National Association of Realtors said pending sales of existing homes hit a record in August... The Pending Home Sales Index for August hit 129.5, up 3.2 percent from July and 4.7 percent higher than a year ago.

The macroblog noted the slip in the non-manufacturing index, but also pointed out stronger data from other sources, as reported by Bloomberg:

Consumer spending was just as strong in the weeks after Katrina devastated the Gulf Coast as before the storm, according to figures from MasterCard, the No. 2 U.S. credit card company. Retail sales other than gasoline and autos rose 6.6 percent in the week ended Sept. 16 from the year-earlier period, unchanged from five weeks earlier, the Purchase, New York-based firm said.

...and by Reuters:

Redbook Research, an independent company, said sales in the fifth and final week of September rose by 3.5 percent on a year-over-year basis.

The International Council of Shopping Centers and UBS, in a joint report, said sales were 0.6 percent higher in the week to Oct. 1 after rising just 0.1 percent in the prior week and falling in the previous two weeks before that. Compared with the same week a year ago, sales were up 3.0 percent, after a 2.8 percent percent rise in the prior week.

Reuters also reports some slowdown for the service sector in the UK:

The Chartered Institute of Purchasing and Supply/RBS said its services Business Activity Index fell to 55.0 last month from 55.2 in August...

...but the euro-zone had an upside surprise:

The CIPS/RBS euro zone business activity index rose more than expected to 54.7 in September from 53.4 in August.

There was also healthy growth in retail trade in Europe, according to Eurostat.

In August 2005, compared to August 2004, the volume of retail trade grew by 2.0% in the euro-zone and by 2.2% in the EU25. Compared to July 2005, the retail sales index rose by 0.9% in the euro-zone and by 0.7% in the EU25.

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