ISM Business Activity Index: Expansion for 7th Mo.

From today's Non-Manufacturing ISM Report On Business Activity:

ISM's Non-Manufacturing Business Activity Index in June registered 58.1 percent, a decrease of 3 percentage points when compared to the 61.1 percent registered in May (see chart above). Fourteen industries reported increased business activity, and two industries reported decreased activity for the month of June. Two industries reported no change from May. Comments from respondents include: "Promotions and sales activity from months ago starting to pay off" and "Increasing demand."

MP: The ISM Business Activity Index for non-manufacturing industries has now been in expansion (index above 50) in 10 out of the last 11 months, and for 7 straight months, both for the first time since 2007, before the recession started. The ISM Business Activity Index has now been above 58 for four consecutive months for the first time since early 2006, more than four years ago. These recent improvements in the ISM Business Activity index provide more evidence of an ongoing, V-shaped economic recovery.

Note: The overall ISM Non-Manufacturing Composite Index (NMI) started in January 2008, and that reading also signals expansion in June at 53.8 (above 50). Brian Wesbury points out that the ISM Business Activity Index is more closely related to real GDP growth than the overall NMI.

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