We got two significant economic releases this morning. First, let’s take a look at the ISM services index. I’ll examine the November JOLTS report separately.Recall that services are about 75% of the economy. Thus, even if goods production is contracting, their share of the economy has declined to the point where that does not necessarily mean a recession is in the offing. So I average both ISM indexes by their economic weights.And the ISM services report for December came in strong once again. The total index was at 54.1, well into expansion territory, similarly the more leading new orders component (not shown) was at 54.2:The three month average of each is 54.1 and 55.1 respectively.Since the ISM manufacturing index improved last week to 49.3 for the total index and 52.5 for the new orders component, and their respective three month averages are 48.1 and 50.0, the economically weighted average of the two for December is 52.9, and the new orders component is 53.8. Their respective three month averages are 52.6 and 53.8.In short, the economically weighted average of the ISM indexes forecasts continued economic expansion in the months ahead.ISM Manufacturing Index Improves In December More Worrisome Signs As Construction Spending The Final Jobless Claims Report Of 2024 Is Good Weekly, But The Trend Indicates Substantial Weakening
