US ISM Service Sector: Stronger numbers contrasts with recent data on spending and employment Wells Fargo

Data released on Monday showed the ISM Services index came in above expectations. Analysts at Wells Fargo suggest the rise in the ISM services survey to 57.8 in September contrasts with recent “hard” data showing the recovery is losing momentum.

Key Quotes: 

“The stronger pace of growth signalled by the survey contrasts with recent “hard” data on spending and employment. However, as a diffusion index, it suggests that the recovery is at least broadening to where more firms are reporting increases in activity, even if “hard” data point to more incremental gains in the overall level of economic activity recently.”

“For the first time since February, more firms reported increasing employment than cutting jobs. The net share seeing orders rise also improved, with the new orders index back above 60.”