U.S. ISM non-manufacturing index rises above expectations in August

The U.S. Institute for Supply Management’s non-manufacturing index rose in August by 2.8 points to 58.5, coming above consensus expectations of a more moderate rise to 56.8. Delving into details, the report came in largely positive, adding credence to the view that the U.S. economy is still top of its game, noted TD Economics in a research report.

Seven of the 10 sub-components rose in the month. Business activity, new orders and supplier deliveries recorded rise of 4.2 points, 3.4 points and 3 points, respectively. The prices paid index is still firmly in expansion territory, but the pace of price growth slowed a bit. The employment index rose marginally as tight labor market seems to be a limiting factor for the pace of employment growth.

Trade-related subcomponents came in mixed. New export orders regained the ground conceded last month, while imports dropped to 52.

Survey respondents continued to express optimism about the economic and business outlook, even while some continued to be apprehensive about logistic difficulties, trade wars and a dearth of available labor.

In spite of the generally upbeat outlook, non-manufacturing companies continue to face headwinds ranging from labor shortages to uncertainty stemming from tariffs and threats of tariffs, noted TD Economics in a research report.

“All in all, most respondents were positive, with their companies well-positioned to weather the storm, which is set to continue as the economy grapples with full employment and rising interest rates”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -57.7308. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex