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Big Miss In ISM Non-Manufacturing Index, Employment Component Comes In Below 50, Lowest Since January
ISM Services comes in at 51.5 vs expectations of 53.2, and a previous print of 54.3. This is the second lowest Service read of the year. And keep in mind services are what drives America. AUDJPY plunges on the news. All components come in below expectations (New Orders, Employment, Business Activity), except prices, which is almost deflationary, but not quite. And most critically, the employment read came in at 48.2: the first posted contraction since January 2010. But the US economy lost only 54K jobs (and over 160k not adjusting for birth death), ergo all is well and double dip is off the table. Crazy pills time.
From the full report:
Economic activity in the non-manufacturing sector grew in July for the seventh consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of
the Institute for Supply Management™ Non-Manufacturing Business Survey
Committee; and senior vice president — supply management for Hilton
Worldwide. "The NMI (Non-Manufacturing Index) registered 54.3 percent in
July, 0.5 percentage point higher than the 53.8 percent registered in
June, indicating continued growth in the non-manufacturing sector at a
slightly faster rate. The Non-Manufacturing Business Activity Index
decreased 0.7 percentage point to 57.4 percent, reflecting growth for
the eighth consecutive month. The New Orders Index increased 2.3
percentage points to 56.7 percent, and the Employment Index increased
1.2 percentage points to 50.9 percent, reflecting growth after one month
of contraction. The Prices Index decreased 1.1 percentage points to
52.7 percent in July, indicating that prices are still increasing but at
a slower rate than in June. According to the NMI, 13 non-manufacturing
industries reported growth in July. Respondents' comments are mixed.
They vary by industry and company, with a tilt toward cautious optimism
about business conditions."
INDUSTRY PERFORMANCE (Based on the NMI)
The 13 industries reporting growth in July based on the NMI composite
index — listed in order — are: Real Estate, Rental & Leasing; Arts,
Entertainment & Recreation; Management of Companies & Support
Services; Agriculture, Forestry, Fishing & Hunting; Retail Trade;
Information; Other Services; Transportation & Warehousing; Public
Administration; Mining; Health Care & Social Assistance; Educational
Services; and Wholesale Trade. The four industries reporting
contraction in July are: Construction; Utilities; Accommodation &
Food Services; and Finance & Insurance.
WHAT RESPONDENTS ARE SAYING ...
- "Our business conditions continue to dramatically outpace last year's." (Information)
- "Although unemployment remains high, consumer attitude has improved
and translates into higher activity levels for us." (Arts,
Entertainment & Recreation) - "Capital funding remains tight." (Accommodation & Food Services)
- "Concerning forecasts and the instability in markets are continuing our focus on cautiousness." (Retail Trade)
- "We continue to see signs of improvement and a slow jobless
recovery. We are also seeing a one-time windfall of business as a result
of the disaster in the Gulf." (Management of Companies & Support
Services)
| ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* JULY 2010 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-Manufacturing | Manufacturing | ||||||||
| Index | Series Index July |
Series Index June |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
Series Index July |
Series Index June |
Percent Point Change |
| NMI/PMI | 54.3 | 53.8 | +0.5 | Growing | Faster | 7 | 55.5 | 56.2 | -0.7 |
| Business Activity/Production | 57.4 | 58.1 | -0.7 | Growing | Slower | 8 | 57.0 | 61.4 | -4.4 |
| New Orders | 56.7 | 54.4 | +2.3 | Growing | Faster | 11 | 53.5 | 58.5 | -5.0 |
| Employment | 50.9 | 49.7 | +1.2 | Growing | From Contracting | 1 | 58.6 | 57.8 | +0.8 |
| Supplier Deliveries | 52.0 | 53.0 | -1.0 | Slowing | Slower | 4 | 58.3 | 57.3 | +1.0 |
| Inventories | 55.5 | 58.5 | -3.0 | Growing | Slower | 4 | 50.2 | 45.8 | +4.4 |
| Prices | 52.7 | 53.8 | -1.1 | Increasing | Slower | 12 | 57.5 | 57.0 | +0.5 |
| Backlog of Orders | 52.0 | 55.5 | -3.5 | Growing | Slower | 3 | 54.5 | 57.0 | -2.5 |
| New Export Orders | 52.0 | 48.0 | +4.0 | Growing | From Contracting | 1 | 56.5 | 56.0 | +0.5 |
| Imports | 48.0 | 48.0 | 0.0 | Contracting | Same | 2 | 52.5 | 56.5 | -4.0 |
| Inventory Sentiment | 59.0 | 59.0 | 0.0 | Too High | Same | 158 | N/A | N/A | N/A |
| Customers' Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 39.0 | 38.0 | +1.0 |
* Non-Manufacturing ISM Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment, Supplier Deliveries and Inventories.
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Sum it up in a Robo Troll photo comment why don't ya?
I like Robo's posts. I look at BOTH the charts and the pictures.
I may not agree with Robo's gold comments but I like his style and his narratives are pretty funny, to be honest..
+1
the employment component needs a birth death adjustment...!!!
Exactly. You have to Governmentalize the figures properly. Imbecilles.
Meanwhile, New Yorkers have a good time - creating some much needed service jobs (security guards).
http://www.nydailynews.com/sports/more_sports/2010/09/02/2010-09-02_fans_fight_in_upper_stands_at_arthur_ashe_stadium_during_novak_djokovic_match_at.html
I like how the old guy tries to throw a punch, falls down over the seats, and apparently hurts himself. Then, another old guy comes down from the upper seats and joins in. Senior citizens throwing down.
Try these, Tyler: http://www.havidol.com/
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battle of the bullshit
quick trip back to 1040? or Brian Sack squeeze to 1140?
Sack Squeeze! a new term for the times!
you're welcome
Services are what drives America? Only if you mean the kind of services that involve a happy ending.
Banking, consultancy, real estate brokerage and all that shit do not even classify as commerce - the people behind most of the companies providing these services would be homeless if it wasn't for big government.
'Service sector america' wow how pathetic, bunch of high degree holders 'employed' only part time at Appleby's. And the bulls LOVE it! Theyll soon be trading beads and seashells, but theyll know seashells have turned the corner ready for firm bull run! LMBO!
Well ISM services is only 70% of the US economy, so not sure we we didn't hit dow infinity on this number.
OT:Where is the Ph.D in Teleprompter.....delayed indefinitely - WTF?
more like a death/death adjustment. of course it's good news. when Shalom does a "Brazil" and simply "buys equities" the spin has to match. I can hardly wait for Exxon/Mobil/Chevron/Texaco/BP/Royal Dutch/Canada Inc. to finally "entitize" with nodding approval.
Here they come to gun the mortgage insurers.
Everyone is trying to "make their year"...
LOL...
WTF? What did they do, announce another bail-out of Ambac?
No pictures?
Our economy is a schizophrenic with multiple personality disorder.
And a propensity for buggery!
I'm a government agency. No I'm a corporation, No i'm a cray dude who talks and sells things to myself. The FED.
Hey NO PROBLEMO! We got 36,000 'jobs' to offset the previous months losses of -2 million jobs!
Wtf - why is the market going the wrong direction? I hope there are still new buyers left out there, guys.
leo oh leo please tell me all is well with this number too.
Hey wheres Leo with his 'all in fully margined' call this morning, and all the other Zerohedge permabull 'tard types, rushed to the hospital with wrecked sphincter syndrome?
leo and robotroll just had their off switch hit
HAAA HA HA I love it pillage! Suddenly the Zerohedge permabull 'tards have 'no comment'. Guess theyre frantically trying to hit the sell button, but there are no buyers awwww thats such a shame really.
I think you maybe a little -- s l o w -- there aren't any bullish people here Leo is really the only one.
Maybe you should stop trying to contribute.
Rylie no there are about 20 more, just go read the posts on the 'jobs report' article where theyre dancing about like morons.
Where's our non inflamatory posting Robo commentator at? Give us some photos or some jazzy shit like that to sum up a this miss.
As mentioned above, I enjoy the charts and pictures. And don't enjoy 'personal' attacks merely because someone is bullish. Certainly there are a couple of frequent posters that are trolls, but wouldn't include Robo, Leo, etc. Just because you don't agree with them, doesn't make them a troll. Perhaps even the reverse. Yes, I junked you.
The Dow is gonna close in the red - I say 10290.
Anyone else?
Bigger, makes perfect sense to me! What else do they have but depending on bull scalps, then short scalps? I cant BELIEVE these idiots actually fell hook line and sinker for Leo's crap that we've 'turned the corner', wildly hillarious! I hope Leo and his moron minions are writhing in pain over the longs they jumped into this morning.
It's going to have to be next week...way too much noise over the last two days, how hilarious was it that every damn CNBS commentator went from things really are bad on the 31st to everything is f-ing wonderful the 1st and beyond. Seriously, do they ever actually listen to themselves?
Though the table seems to be from the old report.
ISM is worthless unless it is positive people...get with the program will you?
Hopefully sarcasm notification not required...
How much have we deficit spent to get this recovery going? $3.7 trillion now since recession started?
Jason T, $27 trillion according to Neil Barofsky, but whats a few trillion difference between pirates?
Quite conveniently, the unemployment numbers - even though negative as well (56K jobs lost), but "better than expected" - have been used today to "prepare" the market for the economical contractions hidden in the ISM numbers, by ramping indices up prior to their release. The services employment index below 50 confirms the negative outlook.
Fit the initially subdued reaction to the ISM news to the minute before the unemployment numbers were released and the daily chart looks a whole lot worse... What would have been negative indices worldwide in a normally trading market, is being kept nicely in positive territory as I'm writing this.
Two basically negative numbers, but markets up 1 or 2%... Unbelievable.
Prices component up (60.3 from 52.7) employment component down (48.2 from 50.9).....double whammy.
I've never understood the diffusion indexes. Does a rise in the prices paid (to 60.3 from 52.7) increase the headline number?
So theoretically a rise in inventories and prices paid would increase the headline number?
That would be yes. Diffusion is supposed to represent a trend line, but is weighted so that there is wiggle room for a fudge factor
Thanks for the response. So that would mean paying higher prices and having more (too much) inventory is bullish for the index/stocks? Silly. Sometimes I wonder how many investment professionals actually understand the statistical releases.
Indeed - that's gonna leave a mark if it persists.
Leo is busy trading Chinese solars:
I hope you are long and levered, because it is going to take a lot of that to make up for your earlier calls on this shit: http://noir.bloomberg.com/apps/cbuilder?ticker1=GGGB2YR%3AIND
Have no fear, Leo is a 'floating bulltard'. Any of his calls that collapse are just 'cntr alt del' and he puts up some other solar stock boner picture. In other words, Leo is chock full o bullshit!
Yeah, the crooks brought her down so they scoop up cheap shares. Please repost this chart in exactly one year.
So one-week "up" charts are relevant today, but one-year "down" charts should be ignored until one year from now? Only in the bizarro world of Mr. Irrelevant.
Thank you CD -- if I have to listen to leo one more day say he's only in when it's up but never gets caught when the POS has been down for the whole year I am going to vomit.
WOW Leo found a Chinese solar stock 'boner' picture to put up! GEE .20 cents youre a real whiz, fuktard!
Sheep, don't ever say I didn't warn you:
WOW Leo! OMG! That Chinese solar stock boner is up EIGHT cents? WHOA!!
Leo is busy trading Chinese solars:
Thanks for your Facebook status update, Mr Irrelevant.
Go Leo Racer, Go Leo Racer, Go Leo Racer Gooooooooo!
Have no fear, we will crank out another stimulus package:
http://www.politico.com/news/stories/0910/41727.html
These people are so incredibly clueless.
Bill, it hurts my brain to read a Leo post, brain cells just drop over dead! I wish there was a way to block IQ killers such as Leo, Johnny B, etc. I'll have to mention it to Tyler.
So we have a market now where 'all is well, definitely bullish', yet at the same time begging for massive stimulus? Manic depression is a frustrating mess! According to Jimi Hendrix anyway.
Big miss? What a joke! Above 50 still points to expansion and the ISM Service index isn't as good of an indicator as ISM Manufacturing. Stay long & strong!
Leo still trying to hype the -56K job loss as a big bullish indicator? What a complete moron.
Should we ignore the jobs lost in July and August? After all, that is the net result of the unemployment report, isn't it?
Why only turnarounds (to be confirmed) in private sector jobs matter (to you)?
ISM services job index declined to 48.2, is that a positive trend?
Please explain.
Riiiiiight Leo, its 'non reliable'...in fact ANY indicator or data that is plunging cant be relied upon, only the -56K jobs report can be relied on to show the massive upswing!
Hey moron-orc Leo, any ISM number under EIGHTY is crap, stop spewing your BS, paid pumper.
OTOH, Leo, when ISM Non-Man is good, CNBS touts it as the "True indicator for the US economy" since the economy has been overwhelmingly service for quite some time.
Caviar,
We never paid as much attention to ISM Non-Manu. as we did ISM Manufacturing. I think it's useful, but not as reliable for the service sector.
remember that the next time the ISM manufacturing index drops (and it will shortly) -- please don't come on saying you never paid attention to that one either...
Well, there you have it. Another ZH validation of a bull shit, market ramping unemployment number. There is always an explanation. So now we're losing service jobs. I suppose Mr. Market thinks that swell news seeing how we are still still up 8 handles on the ES...
It's because we are at artificially high levels in stocks and indices - what you see is not real. Ramp-ups are not real, sell-offs are not real. Actual real trades are marginal, the majority of trading is a zero sum game. That's the only explanation I can come up with. HFT might be efficient at skimming the markets and uplifting bids, keeping the markets at rich levels, but I start to doubt if it still makes money... There are more and more indications that market participation from smaller investors is dropping, so with whom are the institutional traders trading with apart from among themselves? Then if there's always a loser and a winner, do they take turns?
Lot's of questions, trying to rationalize all this...
IMHO, the whole purpose of HFT is to try to lure J6P investor back into the market at which point the broker dealers sell JGP their stock at inflated prices. It's a brilliant plan and plays on the implied stupidity and gullibility of J6P - except .... this time the fish isn't biting.
Certainly the news and interpretation can swing in a certain direction on ZH. Opposite of the MSM.
But can you explain why the NFP number is positive for the economy? Ignore daily move in stocks. For the economy.
Please include a refutation of the silliness of the Birth Death model (you need to be able to discuss both part one and part two of the model), how the media is now focused on 'private sector' jobs even though there are LESS people employed this month than last, the lack of statistical significance of such small changes across big numbers, and that after trillions of gov spending - all we get is 65k private sector jobs?
Mr Market died in the Spring-Summer of 2008. What you see now are the proxies of the Fed, the large banks, trading according to formulas in response to published data in the hopes that traders and, eventually, investors (we're still waiting on that one). To put it bluntly, the big boys are trading amongst themselves, as they did with CDOs, living off the fees, dividends, and defrauding the public by "trading the spread". In return for these services, the Fed has been most accommodating in providing risk free taxpayer money in gobs to these banks. And they're gorging.
Nice summary. Yet I think it all started being manipulated directly in Summer of 2009.
how long can this go on still?
so pray tell why the market doesn't dump on this but does a vertical meltup when the manufacturing ISM is above expectations
perhaps i'm wrong but given the US manufactures next to nothing and the non manufacturing ISM is thus way more imporatnt to the economy shouldn't this be slightly more important?
Yabs, to me, its all about their desperation to get RETAIL to come take this bubble market off their hands! But its not going to happen, no matter how much they hype and pump!
I don't think services ISM is considered as 'reliable' - as the series is much less history...
Of course not, any indicator or data that is down is 'not reliable', only the phony 'better than expected' indicators from the Federal DMSU 'Dept of Makin Shit Up' can be relied upon. Nevermind the indexes have no business being even HALF of what theyre 'priced' at today, its all good.
Let's suppose the market will drop from 1105 to 1090 as a response to the ISM number, so down 15 points with a net result flat S&P500, as opposed to having it drop from 1090 (yesterdays pumped up close) to 1075. Of course it helps if you can blame short squeezes, they are hiding the underlying manipulative schemes...
Which one would you prefer, if it is in your interest of keeping up appearances?
The same happened in the last weeks: ramp-up jobs before releasing bad numbers, by manipulating the data, manipulating the trading, manipulating the media, in short cheating.
This is done in the interest of humanity (really!)
...and to the financial benefit of a handful of insiders (detail?)
It seems like all the ramping and pumping and other BS is at best keeping the market flat. The problem is flat isn't good enough. All of the pension funds and boomers are counting on 8% real return every single year to meet their projections/expectations. If the market is flat, as it has been for the past 10 years, the pension system will implode.
No problemo ... we are still creating jobs in China and India. So on a global scale everything is right on target.
The only problem the Fed and government have is that the US people never got the message to borrow more from the big banks so that even MORE Chinese and Indians can be put to work and the bankers can get bigger bonuses.
But seriously folks, yucka yucka ... if we see more and more jobs transfer from value destroying activities, such as banking to value creating activities such as manufacturing, this is a good thing.
If only the government had a way to exterminate all of the permanently unemployed and allow low cost slaves into this country ... Oh, wait, right, they are working on both.
Tyler, this is the July chart. Need to get August up.
Its all static to fill the air until the election. All these trades on no volume on spurious "news" are done by and for the Fed and its major shareholders.
Mr. Durden.
Time to kick it up a notch with public dossiers on the chief executives and board of directors of the TBTF and the Corporate and all their inter-conections. Think of it as Wikileaks meets cloud computing meets skeletons in the closet. Start with Obama supporter Jeffery Immelt, CEO of GE and member of the NY Fed board of directors. How much TARP did GE get? Call it Citizens' Intelligence Agency. If folks could visually trace the personal interconnections of the Corporate, then maybe the sunlight could disinfect the "markets" and real risk and price discovery would be available for the rest of the the shambling masses.
Yes, we need to get busy exposing them all, and working to dump their pumps. Why cant all these geniuses pool resources, say get a fund of 10 million bucks and wait for blatant no volume pumps to hammer the algos into oblivion? CERATINLY with all these brainiac traders around Zerohedge we ought to be able to scrap together a measly $10 mill. NAH but everyone just has Stockholm Syndrome, content to marvel at their captors as they destroy us all.
To me, this report indicates there are still severe fundamental problems with the economy.
It is impossible to have an economy that doesn't actually produce anything. National wealth comes from the ability to produce products for private consumption and also from trading those produced products with other nations.
To my mind, the service sector must necessarily contract to free workers for consumer goods production. The fact that this hasn't happened indicates market forces have not corrected the economy back to equilibrium, and indeed we are still in the process of aggregating more "bad"
'Still severe fundamental problems with the economy'
Yes we have a failed 75% Borrow to Consume economic model, zero real manufaturing, and 900Trillion in debt.
sheep dog that is indeed the tactic but they seem to get away with it all the time
really there is zero justice in this world
I've been expecting it to crash since last september but still it defies gravity.
In the uk where am from the housing buBBLE IS BACK in full swing.
a 2 bedroom terrace house outide London comes in at 250,000 pounds
WTF average salary is 23,000 a year
yeah thats right so a small house is ten times your salary, historical average is 4
but still the prices go up
SICK totally SICK
at least in the US prices HAVE come down
In my estimation, housing prices are still hovering about where they were at the top of the R/E bubble, 40% min overpriced in my estimation! WHERE did all those trillions GO huh? To PROP up valuations on the banks balance sheets! Here you still have crappy US Homes 3 bdr 1 and a half bath stick homes thrown up in 48 hours priced at $200,000! More govt price prop and intervention to prevent bank balance sheet losses!
Prices reported by realtors, notaries and the like are polished, as it is in their interest to make it seem there is renewed demand and rising prices.
Rather have a look at the constructors' numbers, whether they managed to increase their profits, construct more new homes or CRE, hire more people. I suppose all answers to these qs are negative. So there you have the truth, the rest is window-dressing.
sheep
yeah good use of money
personally even as an owner of two properties id not give a shit if they go down in price. i only care about the rental return on them
thats the only thing that should matter
right now yield is abysmal on anything
What i saw back in the Uk this time was unbelievable
Farmland and indeed factories were being knocked down/built upon
apparently people do not need a place of work and we do not need to grow food
we just need real estate priced at 10 times average salary of those that can even get a job after their workplace has been knocked down and can even contemplate a mortgage like that after paying for food which goes up every month.
DOW chart update:
http://stockmarket618.wordpress.com
You copied and pasted July's summary not August. Is this intentional?
So wait, ISM Manufacturing was in line and markets skyrocket. ISM Services (mind you we are mostly a service economy) misses and the market still marches higher?
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