ISM Index Rises in November

The U.S. non-manufacturing sector powered up last month although hiring slowed, according to data released Wednesday by the Institute for Supply Management.

The ISM's non-manufacturing purchasing managers index increased to 59.3 in November from 57.1 in October. Forecasters surveyed by The Wall Street Journal had expected last month's PMI to increase, but only to 57.6.

Earlier Wednesday, data provider Markit said its own service-sector composite PMI slowed to 56.2 from 57.1 in October. As with the ISM, Markit readings above 50 indicate activity is expanding.

The ISM survey, however shows the non-manufacturing sector is gaining momentum in the fourth quarter. "Comments from the majority of respondents indicate that business conditions are on track for continued growth," the report said.

The ISM's new orders index rose to 61.4 in November from 59.1 in October. The ISM business activity/production index jumped to 64.4 from 60.0. Both levels are the highest since August.

The ISM employment index, however, slowed to a still-strong 56.7 from 59.6 in October.

Earlier Wednesday, ADP said its tracking of private businesses showed a gain of 176,000 service jobs in November, slightly fewer than the 187,000 ADP estimated were added in October.

Non-manufacturers returned to inventory-building last month. The ISM inventory index increased to 55.5 after it fell to a contractionary 49.5 in October.

Cost pressures picked up, despite falling oil prices. The prices index increased to 54.4 from 52.1 in October and 55.2 in September.

The ISM non-manufacturing report is comprised mainly of comments from service-sector companies that make up the bulk of the U.S. economy, but it also includes construction and public administration.

Write to Kathleen Madigan at [e-mail]

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