This morning, the Institute for Supply Management reported that The ISM Non-Manufacturing Index, which includes prices paid for all purchases including import purchases and purchases of food and energy excluding crude oil, showed the strongest print since August 2005.
ISM Highest Since 2005
Why Do investors care? Here’s the explanation courtesy of Econoday:
| Why Investors Care Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data like the ISM non-manufacturing survey’s composite index, investors will know what the economic backdrop is for the various markets. The non-manufacturing composite index has four equally weighted components: business activity, new orders, employment, and supplier deliveries. The ISM did not begin publishing the composite index until the release for January 2008. Prior to 2008, markets focused on the business activity index. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly-and causing potential inflationary pressures. While the ISM manufacturing index has a long history that dates to the 1940s, this relatively new report goes back to 1998. Frequency Source Availability Coverage Revisions |
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| Definition The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade.
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Posted by John Adams on 