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U.S. services sector activity unexpectedly accelerates in November - ISM

Published 12/05/2022, 10:00 AM
Updated 12/05/2022, 10:04 AM
© Reuters.

© Reuters.

By Scott Kanowsky 

Investing.com -- Growth in the U.S. services industry unexpectedly accelerated in November, overcoming a dip in new orders and pressure from elevated prices, according to new data from the Institute for Supply Management on Monday.

The ISM said its non-manufacturing purchasing managers' index increased to 56.5 during the month, up from 54.4 in October.

Economists had predicted that the reading would fall to 53.3. A mark above 50 generally indicates expansion.

The uptick in activity brings an end to a two-month string of slowing growth in the services sector, which makes up more than two-thirds of the U.S. economy.

ISM's reading of new orders received by these businesses dipped to 56.0 from 56.5 in the previous month but remains well within expansion territory, with companies saying that they are adding fresh customers and ramping up projects. New export orders contracted for a second consecutive month but were offset by a jump in imports.

The survey's measure of services industry supplier deliveries moved down to 53.8 in November. A level above 50 points to a slowing in deliveries, which the ISM says is typical as customer demand rises. The backlog of orders edged slightly lower as well.

Meanwhile, ISM's gauge of prices paid in the services sector retreated marginally to 70 from 70.7 in October but is still at relatively high levels.

The figures come after ISM's survey of manufacturing sector activity in November dropped into contraction territory for the first time since the early days of the COVID-19 pandemic. Prices paid by these firms for raw materials also decreased for the second time in nearly two and a half years, in a continued sign that inflation may be shifting from goods into services.

The Federal Reserve has been raising interest rates aggressively in a bid to temper demand and quell a recent surge in price growth. But the U.S. central bank's chair Jerome Powell has said that "the time for moderating the pace of rate increases may come as soon as the December meeting," referring to an upcoming gathering of policymakers on December 13 - 14.

Latest comments

reality will hit Feb - March 2023. When people and the gov refuse to curb spending, this can only end 1 way and it's not going to be smooth
lol soft landing on the moon...maybe. ohhhhh some people gonna have to learn to save the hard way.
Market Watch reported 49.0 ISM so🤔?
I don't see any ISM # reported today for 49
ISM manufacturing PMI from 4 days ago is 49, but this article is about NON-manufacturing.
lol
More data in line with a soft landing.
 Retail sales have been consistently rising for months: https://www.investing.com/economic-calendar/
  And the US has been increasing farm income and crude/gas production, which is categorized as mining.  Of course, the same Russian aggression that increased world inflation is what's been increasing world demand for these US commodities.
where retail sales are up in nominal terms, they have been trending down snice last year using both inflation adjusted and volume terms and companies earnings have been struggling in the sector recently. been honest, I don't know the farming figures, but as it accounts for a very small portion of economic output, it shouldn't have a massive effect on the report, oil production is still below pre covid high and last month only saw a small increase and falling average prices so can't see a reason for massive m/m gain in confidence in the sector, gas production is around record high so I agree I would expect confidence in the sector
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