ISM Non-Manufacturing Index: Growth remains "very solid"

Growth remains very solid in ISM's non-manufacturing sample where the composite index is up 2 tenths to 56.9 in the February report. Employment is a stand-out positive, jumping nearly 5 points to a 4-month high of 56.4.

Not so strong are new orders where growth is down nearly 3 points to 56.7 for the lowest reading since March last year. Nevertheless, this is still a very healthy and sustainable rate of growth.

Supplier deliveries slowed further in February which added to the composite for the month. But the slowing is likely tied, not to demand factors, but to the port slowdown on the West Coast, a slowdown which has since been resolved. The slowing in deliveries is the likely reason behind a rise in inventories and a build in backlog orders. Cost pressures, as they are in most reports, are flat, the result of course of low fuel costs.

A big plus in today's report is wide breadth of strength with 14 of 18 industries reporting growth in the month led once again by accommodation & food services which are likely getting a boost from discretionary consumer spending, itself the result of the strong jobs market and low gasoline prices. In the contraction column are both construction and mining, two sectors that remain weak.