US Services Add Jobs On Fiscal Cliff Worries

Tyler Durden's picture

Remember when the US economy was spun as shaking in its boots due to the "threat" from the fiscal cliff? Neither do US services. According to the just released Services ISM, the composite index spiked to a 56.1 print, a big beat of expectations of 54.1, and back to early 2012 levels. The biggest boost? Employment, which soared from 50.3 to 56.3, a jump in 6 points. It would appear that the Fiscal Cliff was an opportunity for financial firms, which were already laying off tens of thousands, to add many more. Or some other such convoluted logic which has become simply laughable now: even the ISM's own Nieves can't figure it out, saying the jump in employment was "surprising." Other components seeing an increase: New Orders up+1.2 to 59.3, and naturally Inventories + 3.0. Declines were recorded in Business Activity, -0.9 to 60.3, Prices down -0.4 to 56.5, Order Backlogs down -4.0 from 53.3 to 49.5, Inventory Sentiment whatever this is, down -4.5 to 58.0, and Imports down -6.5, to 49.0.


The respondents, as amusing as always:

  • "Although our business activity level is the same as a month ago, it is still higher than normal with plans to continue at that rate for the foreseeable future." (Educational Services)
  • "Business conditions are picking up despite the current economic state and the federal budget issues." (Professional, Scientific & Technical Services)
  • "Consumer optimism increased; lower gasoline prices lead to higher retail sales." (Public Administration)
  • "The holidays will slow construction some, but overall business remains about 25 percent ahead of last year. Weather has been favorable." (Wholesale Trade)
  • "Due to the extra week between Thanksgiving and Christmas, we are seeing our customers shopping later this year." (Retail Trade)
  • "Business has picked up significantly during this last quarter of the year." (Transportation & Warehousing)
  • "Preparing for substantial business due to heavier than normal crop forecast." (Agriculture, Forestry, Fishing & Hunting)


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tooriskytoinvest's picture

Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center.

Earners in the latter group will pay an average 1.3 percent more - or an additional $2,711 - in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent - or up to $1,784 - the D.C.-based think tank reported.

Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.

When the deal was passed by Congress late Tuesday, President Obama said it prevented 'a middle class take hike that could have sent the economy back into recession' and have a 'severe impact' on American families.
'Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,' he said.

To the contrary, the Tax Policy Center says roughly 70 percent of Americans will see their income taxes rise as a result of the deal. They won't rise as much as they would have if no deal had been reached and the fiscal cliff was triggered, but they will go up nonetheless.

otto skorzeny's picture

mark me down for $2k per year additional coming out of my check

gmrpeabody's picture

Two 20 hour per week with no benefits jobs are much better than one 40 hour per week job with insurance..., right?

Fuk their jobs report...

Stormtower's picture

Just a continuation of the baffle em with bullshit model. 

Dr. Engali's picture

I blame Sandy, she must have forced the insurance companies to hire a bunch of adjusters.

busted by the bailout's picture

It's getting harder and harder to see the coming collaspe in the economic data.  The only way now seems to be to discredit that data.

MFLTucson's picture

Who that you know believes this data?  I know no one who has any faith in this goverment or its paws to provide truthful information on anything.

busted by the bailout's picture

I am skeptical by nature, but I try to assess the preponderance of evidence, which at this point tells me the economy is improving slowly. 

How we managed to avoid a recession while Europe, Japan, China, etc. slowed is a mystery to me.  Maybe it will come yet, but I don't see much evidence of it at the moment. 

It looks like it will take rising rates to trigger it now.


overmedicatedundersexed's picture

fiction no matter how often repeated is a lie. some post here that we missed falling into recession..mayb e at GS JPM and some tech co's did..main street did not has not and most likely will not come out of eyes and ears tell me in my community it is so..more empty store space, my real estate tax dropping as my assessed value on my home has dropped 55 percent, those are not recovery. some here post like they were paid to come and sing a co song.

SheepDog-One's picture

Everything coming up roses again, weakens the FED's case for infinity life support so this is probably the top and back to 'troubles' pretty soon.

busted by the bailout's picture

Yes, and it is going to expose the Achilles’ Heel of our economy now -- interest rates.  When they rise significantly, we sink.

walküre's picture

Bennie the President of Clownbux Distributions Inc. did say last year that "investors" were expecting higher returns on their "deposits". In other words, the elite is getting restless and wants to actually see more from us mere mortals on top of what they already stole from us.

Bennis is in a box. Raise rates, destroy the country. Keep rates low, destroy the currency. Options?

busted by the bailout's picture

Yes, he and we are in a box. 

"They" are praying for a nice slow rise in rates, I assume.  I doubt the bond markets will comply, but I suppose it's possible that Ben can keep a lid on them with continued judicious bond purchases.

NotApplicable's picture

Rates can never, ever be allowed to rise. Instead, like time and time before, they'll destroy one currency only to usher in its replacement, as they will come to own everything thanks to Benron's Magic Checkbook.

Navymugsy's picture

Service jobs? Aren't we in the middle of a manufacturing renaissance?

WTFUD's picture

No but the hookers are accepting food stamps.

orangegeek's picture

The only reality check are the markets.


If a sharp turn down arrives - and it should - that should wake everyone up to reality.


Dow Jones jumps 308 points on Barry's raise taxes/hold over spending legislation.  And this is bullish because?  Fucking the consumer so they can spend less.


Revenue/ earnings are due in a few weeks.  Let's see what happens.