US ISM Non-manufacturing: Supply disruptions boost headline  - Wells Fargo

Analysts from Wells Fargo, explained that ISM nonmanufacturing index’s 4.5 jump to 59.8 was likely exaggerated by storm disruptions, but they added that details generally suggest growth remains solid.

Key Quotes: 

“Broad increases in the ISM nonmanufacturing index led to the highest reading since 2005. Similar to the manufacturing report, the headline was boosted by a surge in supplier delivery times, which look to have been lengthened in part due to weather conditions based on respondents’ comments.”

“New orders recovered further from a soft patch this summer and the index is back above its 12-month average.

“The hiring index edged up to 56.8, suggesting the trend in job growth is still strong. We suspect hiring disruptions related to the recent storms to be more apparent in Friday’s employment report, however, and look for payrolls to have risen by 55,000.”

“Prices paid surged in September reflecting a rise in energy costs, but a number of non-energy inputs, including labor, were also reported to be up in price.”