Tuesday, July 6, 2010
The June ISM surveys revealed a modest deterioration in the health of the service sector, with the result that 58.1% of service sector companies, rather than 61.1% in May, reported improving business activity. But as this chart shows, month-to-month fluctuations like this are to be expected—they are almost the rule, not the exception. The important thing is that the level of the index is sharply higher than it was just six months ago, and it is showing that a clear majority of businesses see conditions improving. There is nothing in this index that would point to a double-dip recession.
P.S. The correlation of this index, which I have traditionally followed, to the more frequently cited Service Sector Composite Index is 0.97. Both show almost exactly the same pattern.
Posted by Scott Grannis at 8:44 AM