The Institute of Supply Management (ISM) has now released the November Services Purchasing Managers' Index (PMI). The headline Composite Index is at percent 55.9, down 0.7 from 56.6 last month. Today's number came in slightly below the Investing.com forecast of 56.0 percent.

Here is the report summary:

(Tempe, Arizona) — Economic activity in the services sector grew in November for the sixth month in a row, say the nation's purchasing and supply executives in the latest Services ISM^® Report On Business^®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management^® (ISM^®) Services Business Survey Committee: “The Services PMI™ registered 55.9 percent, 0.7 percentage point lower than the October reading of 56.6 percent. This reading represents a sixth straight month of growth for the services sector, which has expanded for all but two of the last 130 months.

“The Supplier Deliveries Index registered 57 percent, up 0.8 percentage point from October’s reading of 56.2 percent. (Supplier Deliveries is the only ISM^® Report On Business^® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index figure of 66.1 percent is 2.2 percentage points higher than the October reading of 63.9 percent, indicating that prices increased in November, and at a faster rate. According to the Services PMI™, 14 services industries reported growth. The composite index indicated growth for the sixth consecutive month after a two-month contraction in April and May. In November, there continued to be a slight pullback in the rate of growth in the services sector. Respondents’ comments are mixed about business conditions and the economy. Restaurants continue to struggle with capacity constraints and logistics. Most companies are cautious as they navigate operations amid the pandemic and the aftermath of the U.S. presidential election,” says Nieves. [Source]

Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM's Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows the Non-Manufacturing Composite. We have only a single recession to gauge is behavior as a business cycle indicator.

The more interesting and useful subcomponent is the Non-Manufacturing Business Activity Index. The latest data point at 58.0 percent is down 3.2 from a seasonally adjusted 61.2 the previous month.

For a diffusion index, this can be an extremely volatile indicator, hence the addition of a six-month moving average to help us visualize the short-term trends.

Theoretically, this indicator should become more useful as the time frame of its coverage expands. Manufacturing may be a more sensitive barometer than Non-Manufacturing activity, but we are increasingly a services-oriented economy, which explains our intention to keep this series on the radar.

Here is a table showing the trend in the underlying components.

(Click on image to enlarge)