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ISM Services Comes in Below Forecasts

Today's release of the ISM Non Manufacturing Index for October declined from 55.1 down to 54.2 and was lower than expected (55.0).  As a result of this month's decline in the Non Manufacturing Index, the overall combined ISM, which takes both the Manufacturing and Non Manufacturing sectors into account, dropped from 54.5 to 53.7.  In spite of the declines, both the Non Manufacturing and Combined readings are both well above 50.

The table below lists each of the ISM Non Manufacturing Index's sub-indices and where they stand relative to last month and a year ago.  Compared to September, this morning's report was relatively weak as only two of the ten sub-indices increased in October (Backlog Orders and Employment).  Relative to one year ago, this morning's report showed significant improvement in both the headline and sub-indices.  Last year at this time the headline index was at 52.6, while eight out of ten sub-indices were lower back then. 

The charts below show the historical levels of each of the ISM Non-Manufacturing index's ten subcomponents.  With regards to each of these charts, there was little deviation from the headline index.  One notable exception is export orders which saw a sharp drop falling from 50.5 down to 47.5, which is the lowest monthly level since August 2010.