Following the robust November job report, the Institute for Supply Management (ISM) reported that its services index expanded faster in the month than anticipated, at a 56.5 level compared to the estimate of 53.5 and above October’s reading of 54.4. Meanwhile, new orders for U.S.-manufactured goods also beat expectations, rising 1.0% in October.
These positive economic data compound fears as the U.S. economy is not cooling off despite aggressive interest rate hikes by the Fed. According to Deutsche Bank analyst Henry Allen, the recent jobs report means there’s still potential for inflation to surprise to the upside and for the Federal Reserve to stay aggressive.
