The ISM Non-Manufacturing report for the month of November showed that the services sector of the economy (the lion’s share) continues to hum along. While economists were expecting the headline index to come in at a level of 59.0, the actual reading stayed above 60, hitting a level of 60.7. What’s notable about this is that even though it is still off its highs from two months ago, the current string of back to back to back readings above 60 is the longest streak of 60+ readings since the survey began in 1997! On a combined basis and accounting for each sector’s share in the overall economy, the combined ISM for the month of November was 60.6, which is also among the highest readings on record.
Breadth in this month’s report was somewhat mixed. Of the index’s ten sub-components, six were up in November and four were down, but all of them are still well above 50 – the threshold for growth. The key gainer on the month was Business Activity (top chart below table), which is back at its highest levels of the cycle, while one of the bigger disappointments to the downside was Employment, which has seen a bit of a reversal from its recent surge higher in the prior few months (lower chart).