US ISM Non-manufacturing: New orders point to continued growth - Wells Fargo

According to analysts from Wells Fargo, the ISM Non-Manufacturing Index unexpectedly strengthened in October. They noted that respondents noted a bump in activity from hurricane recovery efforts, while supplier delivery times remain elevated. 

Key Quotes: 

“The ISM non-manufacturing index unexpectedly strengthened in October, coming in at 60.1. The increase in the composite index was propelled by better current activity and employment. The hiring index rose to 57.5, consistent with today’s nonfarm payroll report showing that the labor market remains on track after the recent hurricanes. Supplier delivery times still look impacted, however, with the index unchanged at 58.0.”

“Looking ahead, new orders point to activity continuing to grow at a solid pace through the remainder of the year with the index at 62.8 last month. Backlogs continue to rise, albeit at a somewhat slower pace than September.”

“Prices paid eased in October, but remain elevated at 62.7. Both ISMs have signaled rising input costs since last year and point to upward pressure on inflation or downward pressure on margins.”