The ISM services index was essentially unchanged but production and employment weakened with new orders rising.
Please consider the August 2024 ISM® Services Report On Business® emphasis mine.
Economic activity in the services sector expanded for the second consecutive month in August, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® registered 51.5 percent, indicating sector expansion in six of eight months in 2024. This month’s reading indicates sector expansion for the 48th time in 51 months.
Respondent Comments
- “Generally, business is good. However, there are concerns of slowing foot traffic at restaurants and other venues where our products are sold.” [Agriculture, Forestry, Fishing & Hunting]
- “Housing market continues to be dampened by higher borrowing costs. All segments of the industry are affected. Single-family homes for sale, build for rent, and multifamily units are all feeling the effects.” [Construction]
- “Activity is increasing.” [Finance & Insurance]
- “Business continues to be strong.” [Health Care & Social Assistance]
- “Overall business is improving.” [Information]
- “Hiring of employees, contractors and consultants continues to decline as companies look to control costs during a period of economic and political uncertainty. Employee layoffs continue across a broad range of companies and industries.” [Management of Companies & Support Services]
- “Business has slowed, and it is harder than ever to find talent, but less jobs available as well.” [Professional, Scientific & Technical Services]
- “Up in business and activity.” [Transportation & Warehousing]
- “Steady interest rates are impacting investment in nonregulated business silos.” [Utilities]
- “High food costs are impacting customer demand, and weak sales performance has resulted in negative growth overall. Business activity is stable, and supplier costs are generally flat.” [Wholesale Trade]
Mixed Bag
It’s no surprise that Health Care and Social Assistance is strong given the demographics of aging baby boomer and a huge influx of immigration. This has fueled a hiring surge in this sector.
I doubt transportation and warehousing is doing well on average. But one respondent thinks so. This is likely region dependent.
Two negative comments related to restaurant traffic and one negative comment was on construction. Both are easily understandable weaknesses.
If insurance is strong, I suspect the reason is people shopping around looking for better rates.
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September 3: Construction Spending Growth Slows in May, Stops in June, Negative in July
September 5: Fed Beige Book Shows Flat or Declining Economy in 9 of 12 Fed Districts
For those of you who think the economy is not in recession, will 12 of 12 Fed districts in contraction do it?