Jan. ISM Non-Mfg Index Drops to 41.9 From 54.4

The Institute for Supply Management’s non-manufacturing business activity composite index was 41.9 in January, down from 54.4 in December, on a seasonally adjusted basis, the group said yesterday.

This was the first time in 58 months the index showed contraction.

Economists polled by IFR Markets had expected a 53.0 level.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.

The prices paid index, closely watched for signs of inflation, dipped to 70.7 from 71.5.

The employment index decreased to 43.9 from 51.8.

The new orders index was at 43.5, down from 53.9; backlog of orders dipped to 46.0 from 49.0; new export orders stand at 52.0, up from 50.0; inventories declined to 44.5 from 50.5; inventory sentiment fell to 57.0 from 64.5; the supplier deliveries index decreased to 49.0 from 52.5 last month, and imports slid to 41.5 from 50.5.

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