US ISM Non-Manufacturing

US Economy Steaming Up, As Services Jump Higher As Well

Posted Thursday, January 7, 2021 by
Skerdian Meta • 2 min read

The US economy shrank by nearly a third on an annualized basis during Q2, meaning that if it kept that pace it would fall by around 30% in 2020. But, In Q3 we saw a strong reversal, like  in most places after the global re-opening. Although, while in Europe and other places except China the economy weakened again in autumn and is heading into contraction in winter, the US economy is picking up further pace.

ISM manufacturing increased above 60 points yesterday, while today the US services showed a jump above 57 points in December, from 45.5 in November. So, the US economy is expanding pretty fast, which is a nice bonus to Biden.


US ISM December Services Report

  • ISM December services index 57.2 vs 54.5 expected
  • November ISM index was 55.9
  • Full report


  • business activity 59.4 vs. 58.0 last month
  • new orders 58.5 vs. 57.2 last month
  • backlog of orders 48.7 vs. 50.7 last month
  • employment to 48.2 from 51.5 last month
  • new export orders 57.3 vs. 50.4 last month
  • imports 51.8 vs. 55.0 last month
  • supplier deliveries 62.8 vs. 57.0 last month
  • inventory change 58.2 vs. 49.3 last month
  • inventory sentiment 47.7 vs. 49.9 last month
This is has given a fresh lift to equities.
Comments in the report:
  • “Starting to see demand weakening as states go back to shut down. Will look to see business resume in late first quarter, as vaccine distribution takes place.” (Accommodation & Food Services)
  • “Lack of labor continues to be a significant drag on the business. We have plenty of work but are now considering rejecting some orders due to shrinking capacity.” (Construction)
  • “Continued local and state shutdowns negatively impacting a variety of operations. Notably, shipping delays are beginning to affect operations as [parcel companies] all struggle under the strain of holiday-shipping demand. Construction and services continue to also be challenged, as COVID-19 infections become more pervasive with workers calling out to quarantine, etc.” (Educational Services)
  • “COVID-19 continues to be an impediment to normalized business operations, and the pandemic is not abating – only worsening as [we] get into the winter months. Stocks of personal protective equipment [PPE] are adequate but not sufficient for most categories, with the exception of nitrile exam gloves, which are in extremely short supply internationally. Our hospital system achieved 94- percent capacity in our intensive care units and continued to hover around that number with new admissions, fatalities and discharges on a daily basis. This situation continues to impede normal revenue-generating surgical volumes.” (Health Care & Social Assistance)
  • “Deliveries as a whole, are slowing down considerably. Between COVID-19, the holidays, and inclement weather of late, the remainder of [2020] stands to be very challenging regarding maintaining adequate materials for operations.” (Professional, Scientific & Technical Services)
  • “Business quite good, all things considered, although below the original 2020 planned forecast.” (Real Estate, Rental & Leasing)
  • “Business conditions are improving with increased volume, but [growth has] slowed slightly due to COVID-19 shutdowns in some states.” (Transportation & Warehousing)
  • “The general business conditions are steady/stable. Expecting a very slight slowdown to end the year, with a rebound in mid-January.” (Utilities)
  • “We have seen a growing number of product shortages and increased lead times during the last quarter.” (Wholesale Trade)
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