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January Manufacturing ISM Comes In At 58.4, Higher Than Consensus (55.5) And December (Downward Revised To 54.9)
The January Manufacturing ISM follows on the heels of the red-hot GDP number, and blows out all expectations, coming in at 58.4, higher than even the higher end of the range, which was between 53.5 and 58.0. As is well known, a reading above 50 indicates expansion. December Mfg ISM was revised down from 55.9 to 54.9 due to a index rebalancing. Every index in the January ISM report came out at a better reading than December.
Despite the phenomenal number, actual respondents were much more muted in their endorsement of the Obama economic stimulus miracle:
- "Commodity prices are moving up again." (Printing & Related Support Activities)
- "We now believe that we will not have a good upturn until the 3rd quarter of 2010." (Primary Metals)
- "Overall activity is significantly higher than we typically see this time of year." (Machinery)
- "Orders from automotive very strong." (Electrical Equipment, Appliances & Components)
- "Lead times continue to be a problem for electronic components." (Computer & Electronic Products)
Furthermore, the customers inventories low print is troubling, as this presumably indicates that much of the stocking has occurred (and is stuck) at pre-processing levels. Thus, the Q4 inventory-led GDP bounce looks even shakier than before.
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Machinery "overall activity is significantly higher than we typically see this time of year"
Really?
So the struggling our capital equipment company continues to feel at rates lower than 2009 is simply in our heads?
What a relief.
JL,
My company provides services to capital equipment builders. I am still seeing a great deal of stress. I get the sense these builders are still way too big (current overhead levels) based on the future of new equipment purchases. It's pretty much all about service and retrofits. What's your forecast look like? Any improvement expected in Q1, Q2, 2010?
Thx
"The January Manufacturing ISM follows on the heels of the red-hot GDP number, and blows out all expectations.............?
Hell, all we need to do is continue (or increase) the 10% GDP deficit spending along with more wholesale money printing for the next 10 years and all will be well in the universe. How that affects the wage slaves is immaterial to the powers that be. Just keep those corporate and banker pay scales and bonuses high or there will be hell to pay.
CD - Ask Wail Street and they'll tell you that wage slaves have nothing to worry about since they earn so little as to have "no" tax liability, rendering the discussion of any burden sharing moot.
"..........rendering the discussion of any burden sharing moot."
Hi Miles.
Yup, that's the story right out of the corporate/governmental Fascist playbook. Of course, this argument focuses solely on the effective Federal Income tax rate, as if to say that's the only tax anyone pays. It ignores the Social Security withholding the underclass will never see when and if they retire (and where a stealth tax transfer has taken place over the past 30 years) nor all the other little "stealth" taxes we all pay but are hidden from plain view.
I always find it interesting reading about the so called "tax freedom" day, that mythical day sometime in late April or early May, when the various tax burdens have been satisfied and we're now working to pay ourselves. Even with all the so-called "tax cuts" over the past 30 years, that day keeps slipping further and further back and now resides in early May in some higher tax states and very late April in all the rest. When I was a young man, that day was late March, very early April.
So what's going on? I thought the masses didn't pay taxes?
The major tax burdens of "Main Street" are usually paid in blood or for "South of Main" in prison terms or blood which don't count on the forms... We can always discuss FICA, MEDICARE, State, Local, property, vehicle, sales and the literally thousands of other ways taxes are collected. I would argue that efforts like Citi's action to raise their CC rates to 30% on their "prime" customers equate to a tax, as are the extra price supports paid to farmers and the interaction of nearly every aspect of "free enterprise" with the government. The whole of society, with potentially precious few exceptions is intertwined with government action that leads to higher prices and taxes all in the name of supporting "full employment" and "free enterprise". The situation has become so unstable and unsustainable as to cause me to view the whole of the economy and government like a fully loaded 20 ton coal truck mounted upon a Toyota Corolla chassis with a stuck accelerator starting to head up I-80 to the Eisenhower Tunnel.... In the totality of the situation there is no such animal as tax freedom day for anyone.
The tax burden as a percentage of income is hidden in plain sight so that it won't be found. It's everywhere and anywhere you look. Does anyone look at their phone or cable bills? Has anyone actually seen how the price of gasoline breaks down into its components? And those as just the direct taxes. No one talks about how all those corporate taxes translate into a higher price for the person purchasing the item.
I'm in full agreement with you Miles. The problem is that, just like inflation, as long as it's a slow drip drip of increase over time, we all shrug it off as the cost of living in a modern society and never really question the system. Besides, American Idol is on.
At times I don't know who I'm more furious with, the fuckers for doing the reaming or the fuckees for allowing the reaming. When I attend local county governance meetings and start questioning the tax increases, after the second question it's the fools in the audience sitting next to me that demand I be quiet so the meeting can end in time for them to get home to watch the Simpsons. At least for the most part the county commissioners welcome the chance to explain, regardless of whether I think their increases are justified. Misguided they may be but at least they're willing to miss the Simpsons.
Nothing is so bad as something which is not so bad... The Scarlet Pimpernel
+1
Spot-on, CD.
When was the last time that a prior month's/quarter's economic data release was "revised upward"?
Do you mean, besides job losses?
How exactly is this ISM report possibly true, when oil use (including the diesel fuel used in transport trucks) is so low?
Consider that the last time the index was at this level was august 2004 something they point out in the headline. What they don't tell you after is that the print back then was to be follwed by 65 months of decline. Forboding
Yawn. More data that is unbelievable. I will wait for the the revision. Good job Ministry of Propoganda party at the beer garten at 5.
YEA! Beer and eggs after working a reduced third shift is a winner!
How is "oil use" in truck so low... when revenues at FDX and UPS are up 6-7-8% over the prior 3Qs in Q4?
So FedEx and UPS are shipping, but no one else is?
Doubtful.
So you think that the EIA oil numbers are bogus?
A theory from another message board - it isn't contradictory if you assume that FedEx and UPS are taking market share from the US post office.
Diesel fuel use is way down, and FedEx is also doing well.