ISM Services PMI Highlights Strong Growth In The Services Sector
- ISM Services PMI improved from 52.7 in July to 54.5 in August.
- New Orders Index increased from 55.0 to 57.5.
- Business Activity Index grew from 57.1 to 57.3.
On September 6, the Institute for Supply Management released ISM Services PMI report for August. The report indicated that ISM Services PMI increased from 52.7 in July to 54.5 in August, compared to analyst consensus of 52.5. Numbers above 50 show expansion. The index is in the expansion territory for the eighth month in a row.
New Orders Index improved from 55.0 in July to 57.5 in August, while Business Activity Index increased from 57.1 to 57.3.
The Institute for Supply Management commented: “There has been an increase in the rate of growth for the services sector, reflected by increases in all four subindexes that directly factor into the composite Services PMI and faster supplier deliveries.”
Today, traders also had a chance to take a look at the final reading of the S&P Global Services PMI report, which showed that S&P Global Services PMI declined from 52.3 in July to 50.5 in August, compared to analyst consensus of 51.
The ISM report has materially exceeded analyst expectations, which was a surprise after yesterday’s weak Services PMI reports from various countries.
U.S. Dollar Index tested the 105.00 level after the release of the report. The better-than-expected report boosts chances for a more hawkish Fed as the services sector remains in a good shape.
Gold declined towards the $1920 level, driven by stronger dollar and rising Treasury yields. The yield of 2-year Treasuries moved back above the 5.00% level, which was bearish for precious metals markets.
SP500 tested session lows near the 4470 level as traders reacted to the report. Rising Treasury yields have put material pressure on major indices today. The encouraging report is bearish for stocks as Fed policy outlook remains the key driver for equity markets. Traders sell stocks if they fear that Fed may be more hawkish than previously expected.
For a look at all of today’s economic events, check out our economic calendar.