The U.S. ISM non-manufacturing index rose modestly in November. The index was up 0.4 points to 60.7. The headline print came above consensus expectations of a decline to 59. The details of the report were constructive with most of the index’s key subcomponents rising on the month. The business activity subcomponent rose 2.7 points to 65.2, the highest level since January 2004. Prices paid rose to 64.3, while new orders and backlog of orders rose to 62.5 and 55.5, respectively.
Meanwhile, the employment subcomponent dropped for the second consecutive month to 58.4. However, the subcomponent continues to be well in expansionary territory, and above its year ago level. Trade-related subcomponents came in mixed. Meanwhile, imports rose by 3.5 points to 54.5, whereas new export orders dropped to 57.5. Comments from business owners imply that they usually continue to be positive about current business conditions and the economy, especially in domestically oriented sectors, noted TD Economics in a research report.
The cloud of trade uncertainty might continue to be a drag on business investment decisions until a comprehensive agreement between the two nations is in place. Meanwhile, companies continue to report challenges filling in positions.
“The second consecutive monthly decline in the employment subcomponent further corroborates this notion. With the labor market tightening further with every passing month, labor shortages will likely begin to weigh on employment growth and business expansion plans in the months ahead”, added TD Economics.
At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -13.3566. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
