Latest / Markets with Megan: A Quick Financial Markets Update / 031: ISM Service Report: A Game-changer for your Wallet? 08-03-23

Transcript

031: ISM Service Report: A Game-changer for your Wallet? 08-03-23 · Markets with Megan: A Quick Financial Markets Update

• 0:03
  Megan Horneman: Hello, welcome to Markets with Megan.
• 0:05
  Megan Horneman: This is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors.
• 0:09
  Megan Horneman: We're going to talk today a little bit about the ISM Service Report that came out.
• 0:13
  Megan Horneman: This is the sister report to the ISM Manufacturing Report.
• 0:17
  Megan Horneman: It doesn't often get a lot of headline attention but it's very important because the service sector so think about spending on medical bills, on financial services, on cell phone, on transportation, on communication all these things make up the majority of what we spend our money on.
• 0:34
  Megan Horneman: So this is important and it has been a resilient index that we've seen over the recent months.
• 0:41
  Megan Horneman: But what we're seeing this month is a couple things.
• 0:44
  Megan Horneman: It remained in expansion territory.
• 0:46
  Megan Horneman: That's good.
• 0:47
  Megan Horneman: It's rare outside of a recession that this falls in contraction territory because consumers typically will cut goods items so whether that's cars or furniture or electronics before they'll cut their cell phone bill.
• 1:00
  Megan Horneman: But when you look at the details in this report from an inflation standpoint it's a little bit concerning for the Fed.
• 1:07
  Megan Horneman: The price has paid component jumped up, as well as the backlog of orders, which can both be inflationary parts of this index.
• 1:14
  Megan Horneman: The one thing from the labor market again, we're seeing some more cracks here.
• 1:18
  Megan Horneman: The employment component in this index is actually right on the brink of falling into contraction territory, so this is worth noting.
• 1:27
  Megan Horneman: The Fed will take a look at this report.
• 1:30
  Megan Horneman: We'll see if this translates into the employment report that we get tomorrow as well, and we'll continue to monitor all the rest of the economic data this week and be back to report for some more.
• 1:40
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcast at verdance dot com.