US ISM Services Hints at Stronger Employment Report
Thursday, 04 January 2007 14:10:22 GMT
Written by David Rodriguez, Currency Analyst
Actual: 57.0
Consensus: 57.1
Previous: 58.9
US ISM Services fell almost squarely in line with expectations, as a dip in New Orders pushed the headline index off of November's 6-month highs. In a clear break from yesterday's Manufacturing report, a slowdown in demand for services pushed the New Orders index three points lower to 54.4, forcing the Backlog of Orders below the neutral 50.0 mark for the first time since August. On a much brighter note, however, the Employment index jumped 1.7 points to 53.3 on the month, falling just 0.3 points short of the previous September Q4 high of 53.6. Given its solid correlation with subsequent Non Farm Payrolls reports, the ISM Services Employment index certainly hints at the fact that the ADP Employment Change may have overstated risks to the labor market through the final month of 2006. Only time will tell whether the ADP figures or ISM Services Employment number proves a more accurate predictor of Non Farm Payrolls changes.
Did any of you check the correlation with the Employment index?
