January Non Manufacturing ISM Prints At 59.4 On Expectations Of 57.2, Prices Paid At 72.1 Highest Since September 2008

The January non-manufacturing ISM came at 59.4, higher than expectations of 57.2, and compared to 57.1 previously. From the report: "The Non-Manufacturing Business Activity Index increased 1.7 percentage points to 64.6 percent, reflecting growth for the 18th consecutive month and at a faster rate than in December. The New Orders Index increased 3.5 percentage points to 64.9 percent, and the Employment Index increased 1.9 percentage points to 54.5 percent, indicating growth in employment for the fifth consecutive month and at a faster rate. The Prices Index increased 2.6 percentage points to 72.1 percent, indicating that prices increased at a faster rate in January. According to the NMI, 13 non-manufacturing industries reported growth in January. Respondents' comments are mostly positive about business conditions; however, they still remain cautious about the sustainability." But why cautiousness- this is after all the 18 consecutive months of growth? Or is someone concerned what happens when Gen Ben closes the floodgates? With the dollar jumping on the results and stocks falling, it goes to show just how irrelevant economic data is for the bizarro stock market. And yes, prices paid jumped from 69.5 to 72.1, the highest since September 2008. Nothing to see here.

From the survey:

  • "New initiatives creating increase in spending." (Finance & Insurance)
  • "Indications are that business is picking up and that 2011 could see positive growth across many industries. We are seeing an increase in orders at the beginning of the year." (Professional, Scientific & Technical Services)
  • "Starting to see higher prices in many areas. Low inventory levels are leading to longer delivery time frames." (Public Administration)
  • "Business uncertainty seems to be subsiding." (Management of Companies & Support Services)
  • "Business activity is picking up. The challenges in the textile market (cotton/polyester) are significantly impacting price along with the inability to secure pricing for a period longer than two months." (Accommodation & Food Services)
  • "2011 looking better than 2010." (Information)

Hmm, inflation anyone?

And full breakdown:

Full report.