Services ISM Misses, Slides To Lowest Since June; New Orders Records First Contraction After 52 Months Of Growth

Tyler Durden's picture

First it was the Manufacturing ISM posting its first drop since September, and now it was the Services ISM's turn to not only record its second miss to expectations (of 54.5) in a row, but drop from 53.9 to 53.0, for the lowest print since June. However, the most notable development in today's release in addition to the slide in Inventories from 54.0 to 48.0 (impacting Q4 GDP) was the tumble in New Orders down from 56.4 to 49.4 - back to contraction territory: this was the first contraction in the New Orders index since July 2009 after 52 consecutive months of growth. Is it time to start worrying about the Untaper yet?

Is the spike in economic activity in Q3 now over:

The full breakdown:

From the report:

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI® registered 53 percent in December, 0.9 percentage point lower than November's reading of 53.9 percent. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 55.2 percent, which is 0.3 percentage point lower than the 55.5 percent reported in November, reflecting growth for the 53rd consecutive month, but at a slightly slower rate. The New Orders Index contracted after 52 consecutive months of growth for the first time since July 2009, when it registered 48 percent. The index decreased significantly by 7 percentage points to 49.4 percent, and the Employment Index increased 3.3 percentage points to 55.8 percent, indicating growth in employment for the 17th consecutive month and at a faster rate. The Prices Index increased 2.9 percentage points to 55.1 percent, indicating prices increased at a faster rate in December when compared to November. According to the NMI®, eight non-manufacturing industries reported growth in December. Despite the substantial decrease in the New Orders Index, respondents' comments predominately reflect that business conditions are stable."

These industries contracted in December:

The eight industries reporting contraction in December — listed in order — are: Mining; Arts, Entertainment & Recreation; Educational Services; Transportation & Warehousing; Real Estate, Rental & Leasing; Utilities; Wholesale Trade; and Accommodation & Food Services.

From the respondents:

  • "Hiring activity seems to remain steady at mid- to senior-level management positions. However, it is uncertain what impact the Affordable Healthcare Act will have on hiring and full-time status in 2014 as more companies are re-evaluating their healthcare benefits strategies for all positions." (Management of Companies & Support Services)
  • "Business is steady. We are at year-end and the holidays, so it's a little quiet. Expect things to pick up after the first [of the year]." (Construction)
  • "Early, severe winter weather has had a major impact on business. Both customers and employees were unable to reach the workplace." (Arts, Entertainment & Recreation)
  • "Steady, with no significant shifts in demand or supply." (Finance & Insurance)
  • "Overall, we are still seeing the pickup in business which began in the 3rd quarter." (Wholesale Trade)
  • "General business conditions have improved." (Information)

Finally, a look at commodity prices and availability:

Commodities Up in Price

  • Airfares; Beef Items; Dairy; Diesel Fuel; Gasoline*; Milk; and Shrimp.

Commodities Down in Price

  • Chicken; Computer & Peripherals (2); #1 Diesel Fuel (2); #2 Diesel Fuel (3); Fuel (3); Gasoline* (4); Soybean Oil; and Tires.

Commodities in Short Supply

  • Shrimp is the only commodity reported in short supply.

So... buy shrimp?

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rtalcott's picture

Commodities Up in Price  Gasoline* 

Commodities Down in Price Gasoline*


So on the average Gas is unchanged?

Charles Nelson Reilly's picture

for some odd reason gold down $10 on the news?

Jaspergers's picture

dropped $30 in less than one minute, then recovered most of it lol

Quinvarius's picture

They decided to trade 1 contract at 1210 so they could explan why they tripped everyone's paper stops to the regulators.  The joke is on them.  The regulators will never ask.

aint no fortunate son's picture

aaaaannnnndddddd stocks rally on the news

Obama_4_Dictator's picture

Come on Ben! Where are you, we need guidance from you.  We are lost without your words!

RobD's picture

Wow look at that price action in gold!

Sudden Debt's picture



Find out more after this small commercial break...

Oldwood's picture

If you go long shrimp, is that actually a prawn?

Sudden Debt's picture


Winston Churchill's picture

Better get the BLS on it.

Add in kills by drone strikes or something.

realWhiteNight123129's picture

The problem of buying shrimps as a store of value is that it becomes quickly unpleasant if the necessary high cost of storage (freezer) is not spent.

As of the take down of Gold at 13h14, it is not even scarning anyone anymore, might as well put some buy orders just to catch the take down idiocy and make money out of it.


Quinvarius's picture

Digital Shrimpcoin!  It is just as good as real shrimp based money, but smells better.

Ness.'s picture

Add in the Nov. durable goods revision from 3.5% down to 1.8% and back up to 3.4% all in a matter of minutes.  A-maze-ing!!

sbenard's picture

NOTHING can keep a good bubble down for long!

Rising Sun's picture

"Jerry, it's Frank Costanza. Mr. Steinbrenner's here... George is dead... Call me back."

Hedgetard55's picture

Taper we hardly knew ye...

Oldwood's picture

absolutely, without a doubt, undeniably, incredibly irrelevant. Why do we keep acting like numbers mean anything when it is all made up? Besides, isn't there a seasonal adjustment for that? What is a Bitcoin worth or an ounce of gold for that matter? Its all flim flam and no one knows what anything is worth beyond the next 60 seconds and even that is an illusion. Its like arguing about wind direction in a tornado. The gamblers think they have to know, because how else can they place bets? The rest of us just know we are going to get it up the ass eventually and can only go long on KY and Preparation H.