ISM Services Plunges 6.9 Points Into Contraction, Another Recession Warning – Mish Talk

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Chart and excerpts below by permission from the Institute for Supply Management ® ISM® 

Please consider the December 2022 Services ISM® Report On Business®

Economic activity in the services sector contracted in December after 30 consecutive months of growth.

In December, the Services PMI® registered 49.6 percent, a 6.9-percentage point decrease compared to the November reading of 56.5 percent. A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates it is generally contracting.

A Services PMI® above 50.1 percent, over time, generally indicates an expansion of the overall economy. Therefore, the December Services PMI® indicates the overall economy is contracting after a preceding period of 30 months of growth. Nieves says, “The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for December (49.6 percent) corresponds to a 0.2-percent decrease in real gross domestic product (GDP) on an annualized basis.”

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