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On Tuesday, shortly after the opening bell, the Institute of
Supply Management (ISM) reported that the non-manufacturing index
(NMI), which tracks the service sector of the economy, increased
1.1 percentage points in December to 55.0%, exceeding expectations
for a 54.3% reading. That follows last week's PMI report (
), which missed expectations, coming in at 47.2 vs. 49.0%
expected (indicating a contraction for the fourth straight month),
and once again serves to demonstrate the divergence taking place
between the manufacturing and services economies - a key dynamic
that along with the resilient consumer, is serving to sustain the
overall economic expansion.
Recall that any NMI reading above 50% represents expansion while
anything below 50% indicates a contraction. The higher the reading
is above 50%, the faster the rate of growth. Additionally,
according to the ISM, an NMI reading above 48.6%, over time, is
usually indicative of an expansion of the overall economy.
law - keep in mind that the BA manufacturing cuts are having a
neg impact on ISM recovery and there was a GM Strike. numbers are
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