ISM non-manufacturing Index posts recovery high rate of growth

ISM's non-manufacturing sample is reporting the strongest rates of monthly growth of the whole recovery with strength led by construction but including 16 of 18 industries. The July composite index is at a recovery best of 58.7, up a very sizable 2.7 points from June, with new orders also at a recovery best of 64.9, up 3.7 points which points to rising activity ahead.

And activity is already very strong with the business activity (akin to a production index) near a recovery best of 62.4 for 4.9 point surge. Employment is also gaining, up 1.6 points to 56.0 which is very strong for this reading.

All this strength, as likewise noted in this morning's earlier release of the PMI services report, isn't leading to accelerating cost inflation, at least not yet. The prices paid index slipped 3 tenths to what is a more or less moderate reading for this report of 60.9.

Inventory growth is slowing, which points to the need for restocking, while delivery times are slowing but only very slightly. Other details include upbeat comments on construction which, in ISM's sample, appears to be enjoying a much needed bounce.

This report, which is anecdotal like the PMI services report, combines with this morning's hard data from the factory sector that all together point to strong non-inflationary acceleration for the nation's economy this summer.