US Service PMI Surges Near Record High As Margin Pressures Appear

Tyler Durden's picture


Markit's US Services PMI soared to 58.4 in April - blowing away the expectations of 55 - just shy of the record high 58.5 seen in March 2012 and early 2010. All sub-indices rose providing just enough comfirmation that all is well in the world.. but one has to ask whether the fastest rise in new work orders in 3 years is sustainable or simply a post-weather bounce. Input prices are up once again though even as output charges dropped - so much for the dream of ever-expanding margins. Is good news bad?

We have seen this level of exuberant activity before... it has not led to follow through...


The sub-index breakdown...


As Markit notes,

Meanwhile, input price inflation picked up for the second month running and was the fastest since January. Higher cost burdens in turn led to another robust increase in prices charged by service providers during May. That said, the rate of output charge inflation eased since April

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Tue, 05/27/2014 - 10:00 | 4798130 LawsofPhysics
LawsofPhysics's picture

This isn't the inflation you were looking for, move along, move along...

Tue, 05/27/2014 - 10:02 | 4798134 Headbanger
Tue, 05/27/2014 - 10:03 | 4798139 LawsofPhysics
LawsofPhysics's picture

Indeed, show me the balance sheet, show me the "taper"...

Tue, 05/27/2014 - 10:09 | 4798156 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

is the US including hookers and blow in this index yet? i know ive been doing my part to bolster the "services" data.

Tue, 05/27/2014 - 11:27 | 4798464 caShOnlY
caShOnlY's picture

Unbelievable how the stupid really believe in these "indexes".   Just make up whatever shit you want, parade it as a headline and BOOM!! market making ensues!!

Tue, 05/27/2014 - 10:01 | 4798132 Space Animatoltipap
Space Animatoltipap's picture

Another pretty volatile indicator. And at its probable high. Perhaps handy for very short term decicions.

Tue, 05/27/2014 - 10:04 | 4798144 BeetleBailey
BeetleBailey's picture



Tue, 05/27/2014 - 10:05 | 4798146 orangegeek
orangegeek's picture

HP just laid off 50,000.  The ripple effect of this alone is ugly.


Retail is in the tank.  Consumers are tapped.


Car companies ship from manufacturing to the farmer's field - if you want a new car, you have to drive to Nebraska to pick it up.


But I'm sure they didn't make these numbers up.

Tue, 05/27/2014 - 10:22 | 4798205 Serfs Up
Serfs Up's picture

No worries!

China will just hire a buncha service workers from BCG and McKinsey...oh wait....not they won't.  they just fired them.

Tue, 05/27/2014 - 10:25 | 4798210 LawsofPhysics
LawsofPhysics's picture

What's the mandarin for "hookers and blow"?


Is there even a market for such things in China?  Seriously, very disciplined people, probably no market for such things, nevermind.

Tue, 05/27/2014 - 12:20 | 4798699 caShOnlY
caShOnlY's picture

HP just laid off 50,000

BULLISH!! more profit for HP!!

Tue, 05/27/2014 - 10:08 | 4798154 FieldingMellish
FieldingMellish's picture

What inflation? Gold is falling.. see... hold on a sec.. <pound> <pound>... there... falling.

Tue, 05/27/2014 - 10:12 | 4798166 LawsofPhysics
LawsofPhysics's picture

LOL!  Yeah when my gold "falls" it does indeed make a "thud"...


Tue, 05/27/2014 - 10:10 | 4798160 q99x2
q99x2's picture

That graph goes every which way. I don't believe it.

Tue, 05/27/2014 - 10:12 | 4798168 Zgangsta
Zgangsta's picture

Good to see that Tyler has come around and started blaming the weather for things like everyone else.

Tue, 05/27/2014 - 10:19 | 4798184 nakki
nakki's picture
"The Markit PMI™ series are monthly economic surveys of carefully selected companies compiled by Markit." So once again I ask, what companies, and how do you seasonally adjust a SURVEY?
Tue, 05/27/2014 - 10:21 | 4798198 disabledvet
disabledvet's picture

"Work orders" are not payments.

If that commercial paper market seizes up again you could get a wave of bankruptcies...."businesses small and big alike."

Tue, 05/27/2014 - 10:23 | 4798208 LawsofPhysics
LawsofPhysics's picture

Print more!!  Of course, then the input costs for any business making something real or providing essential services like food and energy jumps up again...

Rock and a hard place indeed.  Oh well, ammo keeps getting cheaper, so there's that...

Tue, 05/27/2014 - 10:27 | 4798222 Everybodys All ...
Everybodys All American's picture

Some of the best in fiction comes out of the government these days.

Tue, 05/27/2014 - 10:59 | 4798352 TalkToLind
TalkToLind's picture

Fuck it, I'm blaming the low quality of this comment on the weather.

Tue, 05/27/2014 - 11:13 | 4798406 fzrkid
fzrkid's picture

maybe its not different this time but rather the timing is offset. The market will continue to rise until it goes down. The google dollar question is when that will happen. With the FED and other central banks printing there is no telling how long this charade will continue.

Tue, 05/27/2014 - 11:20 | 4798437 The Most Intere...
The Most Interesting Frog in the World's picture

If you look at the chart closely, it spikes around April of every year, and crashes around October...  What is this really telling us?

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