This page has been archived and commenting is disabled.

Non-Manufacturing ISM, Factory Orders Both Miss Expectations, Drop To 2012 Levels

Submitted by Tyler Durden on 05/03/2013 10:15 -0400

And now for the glass half empty part. Following the better than expected jobs report, driven by women job additions and low-paying jobs, we got the non-manufacturing ISM and Factory Orders both of which missed expectations. The ISM dropped from 54.4 to 53.1, below expectations of 54.0, and the lowest since July 2012, with the employment number dropping from 53.3 to 52. Since this number focuses on services, one has trouble footing this with what the BLS said was a jump in jobs in Services sector but one can't have anything. Elsewhere, factory orders dropped 4%, down from a downward revised 1.9% (was +3%), and below expectations of -2.9%, with March durable goods revised even lower from -5.7% to -5.8%. This was the biggest Factory Goods drop since August 2012. Of course, as Joe LaVorgna just said on a TV, it is best to just "ignore" all data that is missing expectations, or not complying with the narrative.

ISM Breakdown:

Non-mfg ISM charted:

Factory Orders:

From the ISM report:

"The NMI™ registered 53.1 percent in April, 1.3 percentage points lower than the 54.4 percent registered in March. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 55 percent, which is 1.5 percentage points lower than the 56.5 percent reported in March, reflecting growth for the 45th consecutive month. The New Orders Index decreased by 0.1 percentage point to 54.5 percent, and the Employment Index decreased 1.3 percentage points to 52 percent, indicating growth in employment for the ninth consecutive month. The Prices Index decreased 4.7 percentage points to 51.2 percent, indicating prices increased at a slower rate in April when compared to March. According to the NMI™, 14 non-manufacturing industries reported growth in April. Respondents' comments remain mostly positive about business conditions. Cost management and revenue pressures are areas of concern for many of the respective companies."

Let's see how they remain "mostly positive" shall we? Because if one actually reads them one sees something different: uniformly negative

"Similar demand as 2012; demand well-controlled by suppliers. Overall demand trend to become weak." (Agriculture, Forestry, Fishing & Hunting)
"Continued corporate cost pressures creating greater demand for cost restructuring/productivity work." (Professional, Scientific & Technical Services)
"Business continues to fluctuate, making it extremely difficult to forecast. Economic uncertainty is clearly a factor that is influencing discretionary spending. Marketing efforts, therefore, are focused mostly on increasing the spend per visit, getting consumers to stay longer at the property as the frequency of repeat business trends down." (Arts, Entertainment & Recreation)
"Revenue pressures are creating challenges on the expense side of the house." (Finance & Insurance)
"Reducing costs in healthcare and higher education remains of paramount importance." (Educational Services)
"We are seeing no real change for our next fiscal year — budgets are still tough with anticipated spend at previous-year levels." (Public Administration)

Source

- advertisements -

Fri, 05/03/2013 - 10:16 | 3526600 spastic_colon

so /s

Fri, 05/03/2013 - 10:18 | 3526610 FL_Conservative

Quit harshing my B(L)S U4EA.

Fri, 05/03/2013 - 10:23 | 3526637 Stackers

EUR-USD now in full on retard mode.

Fri, 05/03/2013 - 10:48 | 3526823 bdc63

There goes Tyler again, trying to be a Debbie Downer on a "green shoots" day ...

Fri, 05/03/2013 - 13:11 | 3527518 SunRise

Green Shoots guzzling that cool, wet Herbacide!

Fri, 05/03/2013 - 10:22 | 3526603 vmromk

But wait.....

Does all the negative data really matter when the "wealth effect" being created by America's Most Wanted, a.k.a. the "fed" chairman, has boosted the S&P to all time highs ?

Fri, 05/03/2013 - 10:17 | 3526606 mayhem_korner

So what are all the new employees producing?

Fri, 05/03/2013 - 10:20 | 3526616 John Law Lives

"So what are all the new employees producing?"

Smiles. Surely TPTB will find a way to make that addititive to GDP.

Fri, 05/03/2013 - 10:22 | 3526629 spastic_colon

"Surely TPTB will find a way to make that addititive to GDP"

As a "tangible intangible" ....as long as it makes sense to TPTB

Fri, 05/03/2013 - 10:24 | 3526643 LawsofPhysics

"So what are all the new employees producing?" - Anything that does not require any energy or real work, such as moar financial "products" of mass destruction. The paper-pushers and bankers have complete regulatory, judicial, and executive capture of your government. Now what will you ignorant sheep do about it?

Fri, 05/03/2013 - 10:20 | 3526619 Doubleguns

Porn

Fri, 05/03/2013 - 10:29 | 3526677 ejmoosa

Hopium

Fri, 05/03/2013 - 10:18 | 3526609 ilovemilken

Good news = buy buy buy

Bad news = ignore bad news, buy buy buy

Fri, 05/03/2013 - 10:19 | 3526612 docj

MUST HAVE MOAR QE!!!!!!

Balance for the NFP "beat" no doubt. Carry on, all is "well".

Fri, 05/03/2013 - 10:19 | 3526613 RaceToTheBottom

What happens if the rising water is all sewage?

Fri, 05/03/2013 - 10:19 | 3526614 Cursive

Nothing matters. "Unexpectedly strong" NFP number means the tough sleding is over! It's goldilocks. More part-time jobs and mediocre fundamentals mean no inflaction!

Fri, 05/03/2013 - 10:19 | 3526615 Doubleguns

Punt.

Fri, 05/03/2013 - 10:19 | 3526617 buzzsaw99

sir the factory is calling. they want to know if we need any more widgets.

hell no we don't need any widgets we've got widgets coming out of our ears. ask them if they want to buy back last year's widgets.

Fri, 05/03/2013 - 10:32 | 3526710 bdub2

...factory agrees to buy back pennies on the dollar...inventories decline greatly, government numbers look better...bernanke rides off into the demon sunset, win win win. fourth win = sp to 2200.

buying and selling illegitimately amongst one another,,,that sounds familiar.

MOAR ROT! er, MOAR QE if bad, Great American recovery if good.

Insanity Forward!

Fri, 05/03/2013 - 10:20 | 3526618 PaperBear

So this is why gold and silver took off just now,

Fri, 05/03/2013 - 10:21 | 3526621 caimen garou

hows that for a recovery, million dollar ass wipe!

Fri, 05/03/2013 - 10:21 | 3526624 Dr. Engali

Data? Who needs data? Just do what the world's largest hedge fund is doing...BTFD until the shit blows up. That's all we need to know.

Fri, 05/03/2013 - 10:22 | 3526633 Temporalist

Does the MSM have a reason for why silver just jumped past overnight highs? Someone on TV must tell me what to think about this immediately.

Fri, 05/03/2013 - 10:22 | 3526634 DavidC

Hmm, no POMO today, I wonder if this will hold up follwing these ISM figures. although with a number of countries on holiday I guess 'da boyz' can do what they like.

DavidC

Fri, 05/03/2013 - 10:22 | 3526635 Headbanger