The ISM Services Index is a sub-index of the broader ISM Non-Manufacturing Index, which measures the level of activity in the non-manufacturing sector of the US economy. The ISM Services Index specifically focuses on the services sector, which includes industries such as healthcare, finance, retail, and hospitality.
The index is based on a survey of purchasing managers at companies in the services sector, who are asked about their business activity, new orders, employment, and supplier deliveries. The index is calculated by taking a weighted average of the responses, with a reading above 50 indicating expansion in the sector and a reading below 50 indicating contraction.
Like other ISM indexes, the ISM Services Index is closely watched by investors, economists, and policymakers as it provides insights into the health of the US economy. The services sector is a significant part of the US economy, accounting for a majority of employment and GDP, so changes in the index can impact financial markets and the broader economy.
The ISM Services Index is typically released on the third business day of each month, with data covering the previous month. It is considered a leading economic indicator, as it can provide insights into future economic trends and activity.
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