United States Non-Manufacturing Business Activity

Info

History

Chart

Impact:

Medium

Source: Institute for Supply Management

Latest Release:

Date:

Surprise:

3.7

USD

Actual:

61.6

Forecast: 57.9

Previous/Revision:

57.5

Period: Apr

What Does It Measure?

The Non-Manufacturing Business Activity index measures the economic health of the services sector in the United States, focusing on factors like business activity, new orders, employment, and supplier deliveries. This index serves as a critical indicator of the expansion or contraction of the non-manufacturing sector, with values above 50 indicating growth and below 50 indicating contraction.

Frequency

The Non-Manufacturing Business Activity index is released on a monthly basis, typically as a preliminary estimate on the first business day of the following month.

Why Do Traders Care?

Traders closely analyze this index because strong results can boost confidence in the service sector, positively impacting currencies like the USD and stocks, while weaker results may suggest economic slowdown, leading to bearish sentiment in financial markets. The index's timely release allows traders to make informed decisions based on economic forecasts and expectations.

What Is It Derived From?

The index is derived from a survey conducted by the Institute for Supply Management (ISM), which collects responses from purchasing managers across various non-manufacturing industries. The survey includes data from approximately 400 firms, covering aspects like new orders, employment, and supplier deliveries, employing a diffusion index methodology to reflect the overall business activity sentiment.

Description

The Non-Manufacturing Business Activity index cross-examines factors such as business activity, new orders, and employment data within the services industry to provide insight into economic trends in the United States. It is primarily reported as a diffusion index, reflecting the percentage of respondents indicating an increase or decrease in activity, thereby highlighting shifts in economic momentum.

Additional Notes

This indicator is considered a leading economic measure for the services sector and is often watched in conjunction with similar reports, such as the Manufacturing Purchasing Managers' Index (PMI). Its findings can help contextualize broader economic trends, as the service sector plays a vital role in the U.S. economy.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for USD, Bullish for Stocks. Lower than expected: Bearish for USD, Bearish for Stocks.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise
May 05, 2015		61.6	57.9	57.5	3.7