U.S. ISM Services Index (November 2024)

ISM services index tumbles to lowest print since June, but still points to growth

• The ISM Services index fell 3.9 points to 52.1 in November, well short of the 55.7 consensus expectations. Fourteen industries out of eighteen reported growth, the same as in October.  
• Broad based weakness across component sub-indexes weighed on the headline measure. Business activity and new orders both suggested ongoing growth (53.7) despite falling 3.5 and 3.7 percentage points, respectively.   
• The employment sub-index suggested a slower expansion of payrolls, falling 1.5 points to 51.5. November marks the fifth month this year that services sector employers reported growing headcounts.  
• The prices paid sub-component was virtually unchanged (58.2 vs 58.1 in October), while supplier deliveries times rapidly shrank, tumbling 6.9 points to 49.5, signaling faster delivery times for the first time since August.   

Key Implications

• On the face of it, this month's ISM services print is a bit of a surprise, but the details still show robust growth across components. In particular, the employment indicator, which had spent much of the year below the 50 mark, held in expansion territory despite the pullback in activity and new orders growth. 
• This report was softer than expected, but with the details still pointing to expansion, and 14 of 18 industries reporting growth, the services sector looks to be in good shape. If anything, the strong underlying data gives a sense that the November slip-up could be reversed shortly, much the same way that last December's weak print was quickly reversed in January. 

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