The Institute of Supply Management (ISM) has now released the August Non-Manufacturing Purchasing Managers’ Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 55.3 percent, up 1.4 from 53.9 last month. Today’s number came in below the Investing.com forecast of 55.4 percent.

Here is the report summary:

“The NMI® registered 55.3 percent, which is 1.4 percentage points higher than the July reading of 53.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 57.5 percent, 1.6 percentage points higher than the July reading of 55.9 percent, reflecting growth for the 97th consecutive month, at a faster rate in August. The New Orders Index registered 57.1 percent, 2 percentage points higher than the reading of 55.1 percent in July. The Employment Index increased 2.6 percentage points in August to 56.2 percent from the July reading of 53.6 percent. The Prices Index increased 2.2 percentage points from the July reading of 55.7 percent to 57.9 percent, indicating prices increased in August for the third consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth. The non-manufacturing sector has rebounded from the prior month’s cooling-off period. The majority of respondents are optimistic about business conditions going forward.”[Source]

Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM’s Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.

The more interesting and useful subcomponent is the Non-Manufacturing Business Activity Index. The latest data point at 57.5 percent is up 1.6 percent from a seasonally adjusted 55.9 the previous month.