The September Institute for Supply Management (ISM) non-manufacturing Purchasing Managers’ Index (PMI) surged to a 12-year high of 59.8 (consensus: 55.5) from 55.3 in August and an 11-month low of 53.9 in July, versus a prior 16-month high of 57.6 in February. The ISM-adjusted ISM-NMI also rose, to a 2-year high of 58.1 from 55.0 in August and 54.4 in July, versus a prior 18-month high of 56.5 in April that was also seen in February, and a 7-month low of 53.9 in March.
Analysts with Action Economics (AE) noted the mix allowed the ISM-adjusted average of the major producer sentiment surveys to surge to a 13-year high of 59 from already-lofty 55-56 figures since the prior cycle-high of 57 in February and March. The average has risen dramatically from just 50 in 4 of the 5 months through September of 2016. AE added: “We are seeing a surprisingly rapid sentiment lift from the hurricane rebuild that is boosting the mining and factory sectors and apparently carrying the service sector with it.” Note that the employment gauge rose to a 4-month high of 56.8 from 56.2 in August and 53.6 in July, versus a 10-year high of 59.1 in July of 2015, signaling further upside risk for Friday’s jobs report, “beyond the assumed 70,000 hit from Irma that leaves us with a 120,000” September non-farm payroll estimate (consensus: 100,000).