Release Explanation: Similar to the PMI numbers, it surveys Purchase Managers on their sentiment on orders, hiring, inventories, and deliveries. Split into the Service Index (above), and then Service Prices which look at the rate of Inflation when materials and services are purchased. Builds an economic picture of the strength of manufacturing activity ahead of official Government reports. These numbers usually are a pre-cursor to the PMI numbers later in the month. A currency can be very reactive to these numbers as over time they have been a reliable read on Government reports to come.
Trade Desk Thoughts: The ISM reported that its non-manufacturing index plunged to 37.3, 7.1 points lower than October, indicating the service sector of the economy contracted for a second straight month. It was the fastest pace of decline and lowest reading for the non-manufacturing sector since record keeping began in 1997.
The Non-Manufacturing Business Activity Index decreased 11.2 points to 33. The New Orders Index decreased 8.6 points to 35.4 and the Employment Index decreased 10.2 points to 31.3. These are the lowest levels for each of these indexes since they were first reported in 1997. The Prices Index decreased 16.8 points to 36.6, the largest one-month decline in the index and its lowest level since it was first reported in 1997. The only industry which reported growth for the month was Health Care & Social Assistance.
"Every component which makes up the index showed declines in November," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "Exports took a deep 15.5 point decline, another indication that fourth quarter GDP will be especially weak."
Forex Technical Reaction: The S&P was recently trading about 1.6% lower and the dollar remained under 93 per yen.