A surprisingly good report was issued by the Institute for Supply Management within the past hour. Specifically, the trade group reported that the nation's non-manufacturing sector, which has long been in an expansionary mode, strengthened further during the past month. Specifically, its index rose from October's reading of 54.2 to 54.7 in November. Expectations had been that this metric would have eased back to 53.5. It should be noted that a series result above 50.0 signals that this sector is growing; a score below 50.0 suggests that there is some contraction in the important services sector.

Within the report, itself, 11 non-manufacturing industries reported growth in November, including retail trade, utilities, real estate, finance and insurance, and healthcare. At the same time, six industries noted contracting activity. Here the list included educational services, transportation, and accommodation and food services.

Within a sector-by-sector breakdown, respondents in arts, entertainment, and recreation noted that revenues continue to remain well below last year, but that pricing pressures are beginning to ease a bit. At the same time, respondents in professional, scientific, and technical services report that there has been a big increase in new job orders and in new hires for service. However, worries persist about the global slowdown in public administration.

As to components within the aggregate group, we saw faster growth in business activity and production last month, in new orders and backlogs, and in imports. On the other hand, inventories continued to contract, as did new export orders, while growth in pricing slowed last month as did gains in employment. This latter trend is a worrisome development for an expansion that remains fragile in many respects.

Taken as a whole, the report was reassuring, especially in view of the goings on in Washington and the unsettled nature of the fiscal outcome, if the current intransigence regarding the so-called fiscal cliff were to persist into the new year.   

At the time of this article's writing, the author did not have positions in any of the companies mentioned.