The numbers: An ISM barometer of business conditions at service companies such as restaurants and hotels rebounded to 52.7% in November from a five-month low of 51.8% in the prior month.
Economists polled by the Wall Street Journal had expected the index to rise to 52.4%.
Numbers over 50% indicate expansion in the economy. The index has been above 50 for 11 straight months.
Key details: Fifteen industries reported growth in November while three industries reported a decrease in activity.
New orders in the service sector were 55.5% in November, unchanged from the prior month.
Prices paid by services industry for inputs fell only slightly to a still-strong 58.3% in November from 58.6 in the prior month.
The ISM service employment index rose to 50.7 from 50.2 in the prior month.
A separate report from S&P Global reported that the service sector PMI rose to 50.8 in November from 50.6 in the prior month. This matched the “flash” November reading.
What the ISM said: The buildup for the holiday season is not as robust as sometimes in the past but better than last year, said Anthony Nieves, head of the ISM services survey committee.
Respondent in the transportation and warehousing said there was “solid activity heading into the final stretch of the fourth quarter.”
What are they saying? “Employment growth in the U.S. economy has slowed consistently over the past year, but remains solid. The ongoing need to hire workers across U.S. service industries is one factor that will keep the Fed’s monetary policy in ‘higher for longer’ mode,” said Kurt Rankin, senior economist at PNC Financial Services.
Market reaction: Stocks
DJIA
SPX
opened lower on Tuesday while the 10-year Treasury yield
BX:TMUBMUSD10Y
was down to 4.20% in early morning trading.
Read the full article here