The June ISM services number was one point more than expected at 47 and up from 44 in May and it’s at the highest since Sept ’08 when it was at 50, the cut off between contraction and expansion. Business Activity rose 7.4 points to just shy of 50 at 49.8. New Orders rose to 48.6 from 44.4, Backlogs rose 6 points to 46, and the Employment index rose 4.4 points to 43.4 and all are back to near Sept ’08 levels. Export Orders shot above 50, rising 7.5 points to 54.5, the highest since March ’08. Prices Paid also rose above 50 to 53.7 and is up almost 7 points from May. ISM said that “Respondents’ comments continue to be mixed and tend to be industry and company specific about business conditions.” This squares with the ISM reading below 50 which implies contraction in services, which makes up the bulk of the US economic but at a slowing rate of contraction. This number measures the direction of improvement, not the degree.
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