Following on the heels of Thursday’s weaker than expected ISM report for the Manufacturing sector, today’s ISM Non-Manufacturing report also missed expectations. While economists were expecting the headline index to fall to 57.5 from August’s reading of 59.0, the actual reading came in 0.6 points lighter than expectations at 56.9. On a combined basis that accounts for each sector’s share of the overall economy, the ISM declined from 58.0 down to 56.1, which is still firmly in the range of growth.
The table below shows each of the individual components for the ISM Non-Manufacturing report and their change relative to last month and last year. As shown, just three of the ten subcomponents (Employment, Export Orders, and Import Orders) increased this month, while six declined (Supplier Deliveries were unchanged). Prices Paid is now the only component below 50 and is now at its lowest level since January. The biggest decline this month was in New Orders, which fell to 56.7 and is tied for its lowest reading since March 2014. Relative to one year ago, September’s ISM Services report was now as skewed to the negative side as the subcomponents were evenly split between gains and losses at five.