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2005 U.S. Economic Events & Analysis
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ISM Non-Mfg Survey
Definition
The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. Financial market players monitor the business activity index, because a composite index, like its manufacturing cousin, is not compiled by the ISM. Why Investors Care

Released on 11/3/05 For Oct 2005
Business Activity Index, Level
 Actual 60.0  
 Consensus 57.0  
 Consensus Range 54.0  to  60.0  

Highlights
The Institute For Supply Management's non-manufacturing index in October recovered the bulk of September's sharp dip, at 60.0 vs. 53.3 in September and compared with 65.0 in the pre-hurricane month of August.

Inflation remains evident in the report, with the prices paid at a very hot 78.0 vs. an even hotter 81.4 in September. In August, prices were at 67.1. The ISM's reports on manufacturing have also shown sharp month-to-month price increases -- these are early indications that inflation pressures, tied to energy, are percolating in the economy.

The employment index dipped back but still showed month-to-month growth at 52.9 vs. 54.9. The employment reading in the ISM's manufacturing report showed better strength, with both pointing to payroll increases for Friday's big report.

New orders lagged the overall index slightly, at 58.2 vs. 56.6, though backlogs rose nicely to 55.0 vs. 52.0. There were further signs of shipping problems as deliveries slowed once again, to 58.5 from 56.0. Companies throughout the economy appear to be ordering supplies in advance, hedging against the risk of future shortages.

Financial markets showed no reaction to the data which were accompanied at 10:00 a.m. ET by text of a speech from Alan Greenspan. But the report indicates a new bounce in strength for the economy following hurricane disruptions in September -- but also a new bounce higher in prices as well.

Market Consensus Before Announcement
The business activity index from the ISM non-manufacturing declined nearly 12 points in September to 53.3. Until now, the non-manufacturing survey had shown more strength than the manufacturing survey. Hurricane activity was not as damaging in October as in September and this could help the business activity index in October.

Business activity index Consensus Forecast for Oct 05: 57
Range: 54 to 60
Trends
[Chart] The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey.
Data Source: Haver Analytics

2005 Release Schedule
Released On: 1/5 2/3 3/3 4/1 5/4 6/3 7/6 8/3 9/6 10/5 11/3 12/5
Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov


 
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