If manufacturing serves as the economy's "barometer," then the non-manufacturing sector acts as its "stabilizer." The latest data shows that US non-manufacturing activity continued to expand in November, providing a boost to economic confidence.
The Institute for Supply Management (ISM) reported that its Non-Manufacturing Index (NMI) rose to 54.7% in November, marking a 0.5 percentage point increase from October. This figure indicates steady growth in non-manufacturing sectors, which include services, construction, and retail.
An NMI reading above 50% signifies expansion, while below 50% indicates contraction. The November figure not only surpassed the threshold but also exceeded market expectations, reflecting resilience across multiple non-manufacturing industries.
Analysts attribute this growth to robust consumer spending, a stable labor market, and improved business confidence. The sustained upward trend in the NMI has helped alleviate concerns about an economic downturn while providing the Federal Reserve with greater flexibility in monetary policy decisions.
The expansion suggests broader economic stability, as non-manufacturing sectors typically exhibit less volatility than manufacturing. This trend may signal continued moderate growth despite global economic uncertainties.