3 Dec 2014
US ISM non-manufacturing highlights the strength of the US growth story – ING
FXStreet (Barcelona) - The rise in ISM non-manufacturing index combined with better business activity and growing – new orders, exports and backlog of orders, suggests the US economy will drive global growth story in 2015, notes James Knightley of ING.
Key Quotes
“The ISM non-manufacturing index has risen to 59.3 in November, up from 57.1 in October and better than the 57.5 consensus forecast. Business activity has risen to 64.4 from 60.0, which is phenomenally strong and has only been bettered a handful of times in the life time of the series back to 1997. New orders also rose and now stand at 61.4 versus the 50 break-even level while the backlog of orders is also growing, as are export orders. This is really encouraging and with the manufacturing survey also at lofty levels it suggests that the US economy will really drive the global growth story in 2015.”
“The one disappointment is the employment component, which slipped to 56.7 from 59.6. This follows a slight dip in the ADP employment number earlier today and a pick-up in jobless claims in recent weeks. This all points to the risk of a data disappointment in Friday’s labour report.”
“Currently, the consensus estimate is for a monthly increase of 230,000, but we expect 215,000 with probable downside risk. Nonetheless, we don’t think it is the start of a weaker trend. Weather may be a factor in the short term, but in the longer term the strength of the economy gives us confidence that the labour market will perform robustly through 2015.”
Key Quotes
“The ISM non-manufacturing index has risen to 59.3 in November, up from 57.1 in October and better than the 57.5 consensus forecast. Business activity has risen to 64.4 from 60.0, which is phenomenally strong and has only been bettered a handful of times in the life time of the series back to 1997. New orders also rose and now stand at 61.4 versus the 50 break-even level while the backlog of orders is also growing, as are export orders. This is really encouraging and with the manufacturing survey also at lofty levels it suggests that the US economy will really drive the global growth story in 2015.”
“The one disappointment is the employment component, which slipped to 56.7 from 59.6. This follows a slight dip in the ADP employment number earlier today and a pick-up in jobless claims in recent weeks. This all points to the risk of a data disappointment in Friday’s labour report.”
“Currently, the consensus estimate is for a monthly increase of 230,000, but we expect 215,000 with probable downside risk. Nonetheless, we don’t think it is the start of a weaker trend. Weather may be a factor in the short term, but in the longer term the strength of the economy gives us confidence that the labour market will perform robustly through 2015.”