U.S. ISM non-manufacturing index likely to have stayed healthy in August

The U.S. ISM non-manufacturing index is expected to have stayed stable in August. The index had dropped slightly in July but had remained healthy at 55.5 as most measures of underlying activity continued to be strong. For instance, the new orders component rose a bit to 60.3 from 59.9. This was the best reading since October 2015. Meanwhile, the business activity measure came in at 59.3, a tad above its six-month average.

With the solid performance of the two measures in July, and persistent strong spending last month, where real spending grew 0.3 percent in July, the services sector is expected to have maintained good momentum in August. The ISM non-manufacturing reading is expected to have changed little to 55.3 in August, said Societe Generale in a research report.

Moreover, employment in the private sector, excluding manufacturing, rose 140,000 in August, bringing the three-month average to 196,000, implying that service sector companies continue to be upbeat about the outlook, added Societe Generale.