While the ISM Manufacturing seems to get all the attention, we've shrunk that part of the economy to a quite small proportion of activity.  Most of the action nowadays is in the services sector, and hence today's ISM number is more applicable to the broader economy.  The reading of 53.3 is still expansionary but the second worst reading in 2011.  A bit below consensus as well, but thus far the market doesn't care as it continues to look forward to the Japan supply chain rebuild and hopes for 3%+ type of GDP in Q3/Q4.  As well as the very healthy outlook for corporations, especially the multinational kind which have increasingly less need for a healthy U.S. economy.

Specific to the ISM report, new orders shrunk relatively dramatically, and employment was flattish.  As with ISM Manufacturing the bright spot is a large drop in prices.

WHAT RESPONDENTS ARE SAYING ...
  • Business is still up, although some softening seen over last month. (Wholesale Trade)
  • Orders are remaining steady, and outlook for this year is positive. (Professional, Scientific & Technical Services)
  • Economic activity continues to be sluggish. (Management of Companies & Support Services)
  • Have yet to see a real spark that ignites new and invigorated business — still seems lethargic and mired in recession-related preventative moves, and no one sees a real improvement ahead. (Public Administration)
  • Commodities coming down in price, which should help stabilize inflation. (Retail Trade)
ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE

COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS*

JUNE 2011

 Non-ManufacturingManufacturing
IndexSeries

Index

Jun

Series

Index

May

Percent

Point

Change

DirectionRate

of

Change

Trend**

(Months)

Series

Index

Jun

Series

Index

May

Percent

Point

Change

NMI/PMI53.354.6-1.3GrowingSlower1955.353.5+1.8
Business Activity/Production53.453.6-0.2GrowingSlower2354.554.0+0.5
New Orders53.656.8-3.2GrowingSlower2351.651.0+0.6
Employment54.154.0+0.1GrowingFaster1059.958.2+1.7
Supplier Deliveries52.054.0-2.0SlowingSlower1556.355.7+0.6
Inventories53.555.0-1.5GrowingSlower554.148.7+5.4
Prices60.969.6-8.7IncreasingSlower2368.076.5-8.5
Backlog of Orders48.555.0-6.5ContractingFrom Growing149.050.5-1.5
New Export Orders57.057.00.0GrowingSame1053.555.0-1.5
Imports46.550.5-4.0ContractingFrom Growing151.054.5-3.5
Inventory Sentiment58.555.0+3.5Too HighFaster169N/AN/AN/A
Customers' InventoriesN/AN/AN/AN/AN/AN/A47.039.5+7.5

* Non-Manufacturing ISM Report On Business® data is seasonally adjus