The Associated Press, in an unbylined article, had this to say about yesterday's Institute for Supply Management Non-Manufacturing Report (see first bullet below regarding the bolded words):
U.S. Service Sector Expands
Tuesday June 5, 11:20 AM EDT
NEW YORK (AP) — The nation's service sector expanded at a faster-than-expected pace in May, suggesting it could help sustain broader economic growth as the automotive and housing industries slump, a research group said Tuesday.
The Institute for Supply Management, based in Tempe, Ariz., said its index of business activity in the non-manufacturing sector was 59.7 in May. The reading was higher than April's reading of 56 and Wall Street's expectation of 56.
..... The service industries covered by the ISM report represent about 80 percent of economic activity and span diverse industries including banking, construction, retailing, mining, agriculture and travel.
May represents the 50th consecutive month of growth in the non-manufacturing sector, and marked a turnaround from March when the index slipped to a four-year low. The index average so far this year is still below the 2006 average reading of 58.
..... While the strong ISM reading reflects the pickup in the economy, it doesn't signal that the broader economy is due for a significant upswing in coming months, said Brian Bethune, an economist with Global Insight.
Points to make, among a bunch that could be made:
- The first paragraph implies that housing was not part of the index. Last time I checked, the housing industry is a large part of, ahem, "construction," a sector that was indeed part of May's overall stellar result, as noted later.
- The "slump" in the auto industry ignores May's sales results, where everyone but Ford showed decent gains, and GM and Toyota did very well.
- March's "four-year low" was 52.4 -- not a bad number to "turn around" from, given that 52.4 is comfortably in expansion mode.
- You have to be looking really hard for something not nice to say about a month with a reading near 60 when you go start going back and comparing averages.
Let's say some nice things instead (complete history of the report to date is here, converted to HTML format from ISM's Excel spreadsheet):
- The ISM's Non-Manufacturing Report has shown expansion every month except one since February of 2002, or 63 out of 64 months. The sole exception is March 2003.
- Though the index has only existed for 10 years, the current streak of expansion for 50 consecutive months is a record. The previous record was 45 (July 1997, when the report began, to March 2001; yes, it's likely that the streak would have been longer had the index existed earlier, but I'm being nice -- and accurate. :-->).
Cross-posted at BizzyBlog.com.