Goldman Blames Weather For Weak Construction Report But Not For "Super Strong" ISM Number

Tyler Durden's picture

The Kool Aid gushing from Goldman economic desk has become torrential. While the "super strong" ISM number was perfectly organic (in advance of Hatzius starting to demand QE3 in about 3 months, when everything will be spun as having been really stimulus-driven), the firm noted that the plunge in construction outlays were due to the weather. Luckily, Goldman did mention that surge in price paid with the following brilliant conclusion: "the prices paid index rose by 9 points to 81.5-most likely due to higher prices for energy and other commodities." Well, that's why they pay the German economist the big bux.

USA: ISM Survey - Super Strong Manufacturing; Construction Weak, with Weather Probably a Factor

BOTTOM LINE: The ISM manufacturing survey rose ahead of expectations in January, as new orders surge to a new cycle high. In general, the composition of this report was even firmer than the headline result. Construction spending down sharply in December, led by a sharp drop in residential projects and probably due at least in part to weather.

1. The Institute for Supply Management (ISM) surprised on the upside, rising 2.3 points to 60.8 in January.
This increase was mainly driven by a surge in new orders which rose by 5.8 points to a new cycle high of 67.8. The remaining indexes that make of the headline were also up: production rose (by 0.5 point to 63.5), employment strengthened (by 2.8 points to 61.7) and supplier deliveries rose (by 1.9 points to 58.6). As the inventories index rose only slightly, the difference between orders and inventories rose by 5.2 points to +15.4. Regarding the components that do not enter the headline, backlogs surged 11 points to 58.0, customer inventories increased 5.5 points to 45.5, and the prices paid index rose by 9 points to 81.5-most likely due to higher prices for energy and other commodities.

2. Construction outlays fell sharply in December
, led by a 4.4% drop in spending on residential projects. Outlays for other projects were down 1.6%, with most of the decline showing up in the public sector (-2.6%). Data for prior months were revised down on balance, but only slightly. Weather was probably a factor in this report.

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Cursive's picture

Let it snow, let it snow, let it snow....

Each inch of snow equals 100 basis points added to GDP.

Ray1968's picture

Hell, I'll move to Chicago.

Eally Ucked's picture

Probably they have lots of orders for shovels so manufacturing surges.

In the spring we will need a lot of sacks for sand to prevent flooding, another surge. For summer ...... 

TooBearish's picture

US going Zimbabwe style baby dow 30,000

whatz that smell's picture

aapl parabolic... market value bigger by $100 billion since sept...

xom parabolic... market value up $100 billion since sept...

ibm going parabolic... market value has exploded $50 billion since sept...

wealth effect, bitchez!

praise be the bernank! may he blow bubbles a thousand years!

entendance's picture

When the many behave like sheep, the poodles themselves turn into lions. If the sheep, in their sheepishness, create lions, they are responsible of the existence of lions. Violent demonstrations in the European Union against solutions to the financial crisis involving taxpayers and citizens probably brought the crack-down on banks observed there. Whereas in the USA nobody demonstrated seriously against banks (meaning no riot police had to be dispatched). The Americans view that as wisdom: conclusion: their giant banks rule the country even more than in 2008, and their grip is getting tighter (the new presidential chief of staff is a top big banker; the top 6 banks assets are now two third of US GDP higher than in 2008, and rising, and so is their exposure to derivatives).
Thus, when the forces of evil provoke the forces of goodness, the later better punch back, lest evil get even bolder, and more energetic.

Cdad's picture

Just caught a tiny sound bite from a John Stumpf, a freak at Morgan Stanley, suggesting that clarification of the government's role in mortgages must be more explicit.  Really?  Is this where the criminal syndicate known as Wall Street is at? 

Fire hose, please.  Straight down Wall Street, and down Broad, hose out every single building.

Pink slips, please.  Let's start with 100,000 bankers fired.  A good start anyway.

ZeroPower's picture

Lol @ all the jokers that came out of the woods last friday 'its the top! its the top!111'

Clearly they missed the thesis on BTFD.

william the bastard's picture

Check your calander. It's the first.

ZeroPower's picture

Yup - great indicator to buy buy buy. As is QEx - leaving room for any unfortunate hiccups along the way.

whatsinaname's picture

Does the joker list include RoboT? even he ran an article debating arrival at the long awaited top !! Looks like the TPTB are not done yet..

ZeroPower's picture

Indeed, that post was rather near term as he is, afterall, simply playing the intraday trades. Clearly after bursting through 1300 we can conclude that was not the top.

HarryWanger's picture

Gotta say, this was a pretty easy dip to buy and pretty much unfolded as I posted on Friday. 

Two things: yes, the economy is clearly getting much stronger and the Fed is continuing to throw more money in. Both of those equal a market that will continue higher. 

The world isn't ending. That was averted two years ago. Time to move and buy some equities in strong companies.

Mr Lennon Hendrix's picture

Bernanke talks out of his rear and farts inflation, and so do you.

EscapeKey's picture

Has the torrent of lies always been this strong, or is it accelerating?

Oh regional Indian's picture

Luckily, ORI did mention the recent surge in Middle Eastern revolutionary zeal, with the following brilliant conclusion,"most likely due to centuries of oppression by a heartless ruling elite".

There, can I get paid big bucks to be a ME expert now?



gwar5's picture

Goldman has more spin than Linda Blair's head in the Excorcist.

A_MacLaren's picture

LOL - I see your head spin and raise you a projectile vomit.

Caviar Emptor's picture

I blame Alan Stanford. That's Sir Alan to you.

Temporalist's picture

As a child I watched "Punch and Judy" puppet shows; this is much better.

hedgeless_horseman's picture

US Dollar Index heading a little further South at the moment.

SheepDog-One's picture

Lemmings mesmerized watching the meaningless equities rise as the dollar collapses. Just another day in 'history lessons clearly not learned land'.

topcallingtroll's picture

This is still all good until it turns all bad. Maybe furiners will come in and buy all those abandoned houses in florida and bail us out here. Our housing prices look great from euroland.

blindfaith's picture

we are all preaching to each other on what we can see is true.  But we don't have the soap box, we don't have the perceived expertise to be heard or paid attention to.  We are simply 'noise' fromthe audience.  Only when the media powerhouses decide to wake up the average American can there be, will there be, any change.  And the media will only do that when their rice bowl is in jeopardy. 

The show must go on, the music must keep playing, the lies kept on spinning...the alternative is to scary for any Narcissus to embrace regardless if they are at Goldman, JPM, the Treasury, the Fed, Congress or the White House.

It is just that simple, we have not gotten their undivided attention, and we are not in the fraternity.

economists_do_it_with_models's picture

Dow +95.  Nasdaq up even more %-wise.  But IYR & USO down.  Shows cracks under the surface.

Today is finally a good opportunity to go short -- especially energy stocks in my humble opinion.

topcallingtroll's picture

I agree with you on the short.thingy. decided to sell my energy ositions today but i frequently short too early. May take a pass this time.unless we have a bigger mini.spike. strangely oil is not overbought right now. Just recently uso bounced off somewhere near the 200dma and may be through.forming a base but i sure as hell hope not. Rosy Scenario would not be pleased.

topcallingtroll's picture

Maybe the evil squid is right this time. There were times on construction crews where the weather did stop us, but my only.manufacturing job was indoors safely protected from the elements.

Josephine29's picture

These prices paid figures come on the back of what the Dallas Fed and the Chicago Purchasing Mangers Index told us yesterday. So there are inflationary signals as some are pointing out.


Meanwhile the US Federal Reserve’s preferred measure of inflation core CPI shows hardly any inflation at all as it tries to shout, move along here nothing to see…..