The August Service ISM index dropped modestly in August. Analysts at Wells Fargo, point out that the headline print of 56.9 only barely missed consensus, and ad that underlying details suggest the initial boost from the re-opening of the service economy is starting to fade.
Key Quotes:
“The headline services ISM came in at 56.9, a hair shy of the 57.0 consensus estimate and down slightly from the 58.1 reading in July. The slip in business activity from 67.2 to 62.4 was slightly more pronounced.”
“A more pessimistic take would be that some offsetting moves in the subcomponents suggest slightly more going on than just a mere slowing. New orders dropped more than 10 points to 56.8.”
“The employment component is looking better at 47.9 versus 42.1 last month, but this would still indicate merely a slowing in the pace of layoff rather than outright hiring in the service sector.”
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