The ISM Non-Manufacturing Index, a nationwide survey of the services, construction and financial industries, is expected to fall 2.4 points to a reading of 42.0 in November. Such a decline would fall in line with the survey's cousin index, the ISM manufacturing index, which fell 2.7 points to a 28-year low of 36.2 on Monday.

"The index slumped to recessionary levels in October and we have penciled in a further decline in November," said Paul Ashworth, senior U.S. economist at Capital Economics.

How big the decline will be is disputed among the 64 economists polled by Bloomberg; expectations range from 37.0 to 46.5.

John Herrmann from Herrmann Forecasting said the NMI will be one of many weak reports seen this week, all of which will support the conjecture that the U.S. economy is in for a hard landing. He looks for the report to decline to 41.0, a level that may be consistent with his forecast for a fourth-quarter decline of 5.50% in real GDP.

The key components to watch will be the business activity and new orders indexes, both of which came in at 44 in October. In addition, the report's employment index could have implications for Friday's release of the November nonfarm payrolls report, which economists expect to show 335k net job losses.

The NMI employment index was at 41.5 in October, a weak level confirmed by 240k net job losses in the month. With economists expecting an even worse decline in nonfarm payrolls, it wouldn't be surprising to see the NMI employment index continue to slip.

The prices index is likely to have little impact on markets, as numerous reports have already shown a rapid moderation in prices that this report should confirm. For instance, prices in the ISM manufacturing index plunged to 25.5, the lowest level in nearly 60 years.

The NMI is compiled using data collected from purchasing and supply executives nationwide, and survey responses reflect the change in the current month compared to the previous month. The index reading is arrived at by using the net difference between the percentage of responses in the positive economic direction versus the negative. A reading above 50 indicates growth, whereas a figure below 50 indicates slowdown.

The headline figure is a composite index based on four of the top indicators, each given equal weight: business activity, new orders, employment, and supplier deliveries.

By Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

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