The ISM Services Purchasing Managers’ Index, due out on Thursday, provides the final hint toward the official labor figures. While Manufacturing PMI was stronger than forecast, the service sector expansion is expected to slow in December. Business optimism is fine but the dollar, which is torn by a move away from the safe-haven currency and higher yields, needs jobs, FXStreet’s Analyst Joseph Trevisani reports.
Key quotes
“Purchasing Managers’ Indexes (PMI) from the Institute for Supply Management (ISM) are expected to maintain an optimistic outlook in December with the general measure slipping to 54.5 from 55.9 in November. The Employment Index is forecast to drop to 50.7 from 51.5 while the New Orders Index should fall to 54.9 from 57.2. Prices paid will fade to 65.2 from 66.1 in the estimate of economists surveyed by Reuters.”
“Since the original collapse in March the labor market has been the key to the US economy and the dollar. That remains true. Business executives may be correct that a recovery is building the next two or three quarters but until robust job creation resumes no PMI figure, no matter how optimistic, will invigorate the dollar.”
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