FXStreet (Guatemala) – Rob Carnell, analyst at ING Bank explained that the non-manufacturing ISM is a decent contemporaneous indicator of consumer spending, and as such, the 59.0 index, (slightly down from 60.3 in July) sends a clear picture of robust US consumer demand.
Key Quotes:
“Business activity has now been above 60 for three consecutive months. New orders also put in a strong bid, with a second month above 60, though this seems to be concentrated in the domestic sphere, with export orders down to 52.0 from 56.5.
With payrolls looming, it is tempting to view the dip in the employment sub-index to 56.0 from 59.6 as a problem. But as we noted earlier in the week, the correlation of the direction of the ISM employment sub-index with the direction of the payrolls change, is virtually zero.
Anything is still possible. But based on the run of data so far, the ISM indices, conference board, and ADP, if there is any consistent message form these data, it is telling us not to expect much difference in the labour report this month compared to last. Our hope for some more evidence of rising wages based on income and age breakdowns of consumer confidence is more of a longshot view, than a hard conviction call.
As such, the forthcoming labour report will likely not deliver enough to make a September rate hike look credible. And the Fed will probably just try to open the door a little further for October, perhaps pushing up the importance of market stability, and down the idea of data dependency.”
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