The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

The Sept ISM services index hit 50.9, almost 1 pt more than expected, up from 48.4 and is the first time above 50 since Sept ’08 and implies expansion in the non manufacturing sector. Business Activity rose almost 4 pts to 55.1, the highest since Oct ’07 (measures the direction of change, not the degree) but the other components were mixed as just 5 of 18 industries reported growth. New Orders rose to 54.2 from 49.9 and Backlogs rose a sharp 10.5 pts to 51.5. Employment though remained sluggish, highlighted also by last week’s data, rising .8 pts to 44.3. Export Orders fell back below 50 at 48.5, down 6.5 pts. Prices Paid fell to 48.8 from 63.1. The ISM said “even with the overall m/o/m growth reflected in the report, respondents’ comments vary by industry and remain mixed about business conditions and the overall economy.” Bottom line, the data over the past week is best described as Blah and while today’s # was slightly better than expected, the recovery will clearly be bumpy.