Monday, May 05, 2008

ISM Services report shows that economy is not as weak as expected

The ISM Non-Maneufacturing (Services) report for April shows that the economy is not as weak as people had expected. Yes, the economy is weak, but is still growing very modestly. The ISM NMI/PMI index rose moderately, shifting from a very modest contraction in March to a modest expansion in April. This was a relatively positive report, but it still shows that the economy is not very strong, yet.

Production continues to grow, but at a slower and barely positive rate.

New orders continue to grow, but at a slower and barely positive rate.

Backlog of orders is now stable, flipping from contraction in March.

Employment is growing again, flipping positive from contraction in March.

Inventories are contracting again, flipping from expansion in March.

Unfortunately, prices continue to rise, and at a faster pace.

Unfortunately, new export orders are now contracting, flipping from growth in March.

Imports are stable, slowing from a moderate growth pace in March.

In short, this was a positive report, but just barely and was rather mixed.

The so-called recession is having trouble materializing. Meanwhile, the slowdown remains quite entrenched.

-- Jack Krupansky

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