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According to the ISM Non-Manufacturing PMI, economic activity has picked up nicely: the score rose from 53.7 to 55.1 points, reflecting stronger growth. A drop to 53.2 points was expected.  

This is the third consecutive rise. Is the US economy actually doing better already? Has the Fed hit the QE button too early? Not if we look at the employment component.

Also the important internal components of this report are very positive: new orders rose by 4 points, from 53.7 to 57.7 points. The business activity component jumped by 4.3 points to 59.9 points, also showing high activity.

However, the employment component disappointed: while still staying in growth territory, it fell 2.7 points to 51.1. This reflects slow growth – similar to the weak growth of the whole US economy.

Here’s a quote from the report:

Respondents’ comments continue to be mixed; however, the majority indicate a slightly more positive perspective on current business conditions.”

The Fed looks at the bigger picture of the job market: not only the unemployment rate, but also the participation rate and the unemployment rate.

Also the ISM Manufacturing PMI exceeded expectations by rising back to growth territory: from 49.6 to 51.5 points.

A better figure for the job market came from the ADP NFP: a gain of 162K, better than expected.

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