The survey says!

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 54.2 percent in October, 0.9 percentage point lower than the 55.1 percent registered in September. This indicates continued growth this month at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 55.4 percent, which is 4.5 percentage points lower than the 59.9 percent reported in September, reflecting growth for the 39th consecutive month. The New Orders Index decreased by 2.9 percentage points to 54.8 percent. The Employment Index increased by 3.8 percentage points to 54.9 percent, indicating growth in employment for the third consecutive month. The Prices Index decreased 2.5 percentage points to 65.6 percent, indicating prices increased at a slower rate in October when compared to September. According to the NMI™, 13 non-manufacturing industries reported growth in October. The majority of the respondents' comments reflect a positive but guarded outlook on business conditions and the economy."

The interesting internals are found in the new orders and employment -- they're diverging.  New orders and production both declined while employment accelerated from near-flat to a healthier pace. 

Some of this undoubtedly reflects seaosonal hiring, but not all.  Backlogs contracted, inventory sentiment remains far too high and new orders and production, while positive, both slowed their rate of increase.

There were no commodities, other than pharmaceutical-related products, reported to be in short supply.

I would call this report neutral; it was below September's print and missed on expectations by a bit, but not much.  In addition the hopium remains in force on the employment side, which counter-balances a drop in oew orders and production.

If I had to assign a grade, it would be a C+.