ISM Services Beats; Jumps To 9-Month Highs... They Think

Tyler Durden's picture

On the heels of Markit US Services PMI printed a modestly disappointing 58.1 (missing the 58.2 hope and well below the early month Flash print but still 14 month highs), the ISM Services (we are unsure if this is seasonally-adjusted, manually-adjusted, or just adjusted) printed a healthy beat at 56.3 vs 55.5 expectations and rose to its highest since August 2013. Export orders dropped but employment improved - though remains well below pre-weather levels (while the employment sub-index for manufacturing dropped).  

Considering yesterday we exclusively reported that through the magic of seasonal adjustments, Monday's worst ISM Mfg print since February ended up being the best month of the year, we can only imagine how bad the unadjusted data must be. Sadly, we won't know: the ISM does not actually make its unadjusted numbers public. Only those fudged just enough to push rigged markets higher, markets which today have ignored hard data on trade, labor and productivity, and instead focus on not just a self-serving survey, but a seasonally-adjusted survey. 

 

 

The employment sub-index rose but remains notably below pre-weather levels of exuberance...

 

The seasonally adjusted tables. Not to be confused with the actual underlying, unadjusted data.

Here is what the respondents said: remember, supposedly one must seasonally adjust these answers:

  • "Business remains generally flat to slightly positive." (Health Care & Social Assistance)
  • "Market is picking up with large construction projects for the second half of the year." (Construction)
  • "Business is steady with earnings and growth in line with expectations." (Finance & Insurance)
  • "Business activity remains steady. There continues to be pressure from rising material and services costs." (Professional, Scientific & Technical Services)
  • "Steady activity in sales and improved margins." (Retail Trade)
  • "Backlog remains strong. Retail business is up. Project based business is also up." (Wholesale Trade)
  • "Additional capital projects beginning Spring/Summer." (Utilities)

And since the economy is improving, if only based on seasonally-adjusted surveys, prices must be popping. And sure enough, here are the commodities reported to be up in price:

  • Beef Items (6);
  • Dairy (6);
  • #1 Diesel Fuel (5);
  • #2 Diesel Fuel (6);
  • Food Products;
  • Fuel (2);
  • Gasoline (6);
  • Lumber — Pine,
  • Plywood Products,
  • Spruce,
  • Spruce Studs, and Treated;
  • Medical Equipment;
  • Paper;
  • Plumbing Supplies;
  • Professional Labor (3);
  • Stainless Steel Products (2); and
  • Stainless Steel Sheet.

And now enjoy your far more costly, if seasonally-adjusted recovery.