Reuters logo
Instant View: Service sector picks up modestly in May: ISM
June 5, 2012 / 2:14 PM / 6 years ago

Instant View: Service sector picks up modestly in May: ISM

NEW YORK (Reuters) - The pace of growth in the vast services sector picked up a tad in May as a gauge of new orders improved, according to an industry report released on Tuesday.

COMMENTS:

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO, NEW YORK

”The (equities) market is very fearful of the economic data. Even if it was in line with expectations there’s a sigh of relief from many that it wasn’t worse.

“Europe’s obviously a concern, but we’ve been selling off for weeks on that. A slightly better than expected services number, which makes the majority of the U.S. economy, is a sigh of relief in the face of a lot of bearishness.”

TOM PORCELLI, CHIEF ECONOMIST, RBC CAPITAL MARKETS, NEW YORK

“It is interesting that services held up as well as it did. If you read through the commentary by the respondents it does not reflect the data, however, and I am surprised that the respondents were not more pessimistic. The respondents’ comments are not a reflection of the economic backdrop we have today. Overall, the data held up, but is still at a low level and I do not think this counters the significantly weak data we have been seeing.”

OMER ESINER, CHIEF MARKET STRATEGIST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON

“The headline is a little better than expected but when we look at subcomponents of the report, most notably employment, there’s more disappointment. It fits with the most recent batch of economic data that suggests a slowdown. But in a broader context, we are still doing better than other major economies. It still remains to be seen if we’re facing more Fed easing.”

MICHELLE MEYER, SENIOR ECONOMIST, BANK OF AMERICA MERRILL LYNCH, NEW YORK

“To me, the disappointing part of the report is in the employment component. This further supports the idea of slowing job growth. This adds ammunition to last Friday’s disappointing payroll number.”

“Next month, we could see modest improvement (in payrolls) because we were still seeing some payback for the weather-related gains from earlier this year. For the rest of year, we won’t see payroll contraction but it will be in the order of sub-100,000 gains a month.”

“If economic conditions worsen and people perceive it’s difficult find a job, we could see a further drop in the participation rate, which could cap a rise in the jobless rate.”

“The expansion in the services sector like the manufacturing sector has been modest with the overall recovery.”

MICHELLE MEYER, SENIOR ECONOMIST, BANK OF AMERICA MERRILL LYNCH, NEW YORK

“To me, the disappointing part of the report is in the employment component. This further supports the idea of slowing job growth.”

MARKET REACTION:

STOCKS: U.S. stocks edged higher after the data.

BONDS: U.S. Treasury debt prices eased slightly.

FOREX: The dollar gained versus the yen.

Americas Economics and Markets Desk; +1-646 223-6300

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below