• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Non-Manufacturing ISM Soars To 9-Year Highs Months After Hitting 4-Year Lows

Tyler Durden's picture


US Services PMI fell from June's 61.0 level to 60.8 (slightly below the flash print of 61.0 suggesting modest weakness in the latter end of the month) ending a two-month streak of post-weather exuberance as new orders and jobs data slowed, and Markit warns "growth may have peaked." Factory Orders rose 1.1% for the biggest beat in 9 months. ISM Services smashed expectations and surged to Nov 2005 highs (from 4-year lows just 4 months ago - volatile?) with most sub-indices improving except new export orders fell to 4-month lows.

US Services PMI dropped modestly:


“While the economy looks set to continue to expand at robust pace in the second half of the year, these summer months may turn out to represent the peaking in the rate of growth.”


So just to baffle everyone with endless BS, moments later ISM Services smashed expectations to its highest since Nov 2005 - a few short months after plunging to 4-year lows.


The breakdown of components:

From the report, which hopefully had all of its seasonal adjustments input correctly:

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee. "The NMI® registered 58.7 percent in July, 2.7 percentage points higher than the June reading of 56 percent. This represents continued growth in the Non-Manufacturing sector. This month's NMI® is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.4 percent, which is 4.9 percentage points higher than the June reading of 57.5 percent, reflecting growth for the 60th consecutive month at a faster rate. This is the highest reading for the index since February 2011 when the index registered 63.3 percent. The New Orders Index registered 64.9 percent, 3.7 percentage points higher than the reading of 61.2 percent registered in June. This represents the highest reading for the New Orders Index since August 2005 when it registered 65.3 percent. The Employment Index increased 1.6 percentage points to 56 percent from the June reading of 54.4 percent and indicates growth for the fifth consecutive month. The Prices Index decreased 0.3 percentage point from the June reading of 61.2 percent to 60.9 percent, indicating prices increased at a slightly slower rate in July when compared to June. According to the NMI®, 16 non-manufacturing industries reported growth in July. Respondents' comments indicate that stabilization and/or improving market conditions have positively affected the majority of the respective industries and businesses."

Virtually all industries, 16 out of 17, reported they expanded in July. The only contraction was reported in Utilities.

Here is the all important New Orders series, shown unadjusted and seasonally adjusted:

This is what the respondents said:

  • "Conditions are improving." (Construction)
  • "Slight improvement in the economy, but still experiencing delays in client project start-ups. Expecting some improvement in 4th quarter." (Professional, Scientific & Technical Services)
  • "Animal proteins seeing impact of drought, PEDv [Swine virus], thinning of herds and supply and demand issues. Produce pricing is going up due to drought and crop yields." (Accommodation & Food Services)
  • "Second half of the year is looking promising for increased orders versus last year." (Information)
  • "The area continues to benefit from a solid economy bolstered by the tourism and a rebuilding construction sector." (Public Administration)
  • "Business is still very good. Expecting continued growth in the 2nd half of the year." (Retail Trade)
  • "Business has been strong this summer after a late start due to the poor spring weather." (Wholesale Trade)

Unlike in the Manufacturing ISM, here Helium continues to be in short supply.

Finally, Factory Orders...biggest beat in 9 months.

Charts: Bloomberg

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Tue, 08/05/2014 - 10:12 | 5048554 PlusTic
PlusTic's picture

More fake survey data to back-up the insanity...

Tue, 08/05/2014 - 10:14 | 5048569 NidStyles
NidStyles's picture

Does anyone actually believe this BS?

Tue, 08/05/2014 - 10:17 | 5048582 Sudden Debt
Sudden Debt's picture

Obama... and he wants you to show your gratitude for this recovery to him...

a nice little mugshot on mount rushmore or something...

but for the rest you'll need to blame somebody else...

Tue, 08/05/2014 - 10:33 | 5048665 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

The numbers are so "dirty" that we should supply these fucks a BIDET so they could wash their assholes full of shit!

Tue, 08/05/2014 - 10:19 | 5048592 PlusTic
PlusTic's picture

believe it, they're slamming EUR/Treasuries because of it...hedge funds are mega short EUR/Treasuries

Tue, 08/05/2014 - 10:20 | 5048602 lordylord
lordylord's picture

"Does anyone actually believe this BS?"

Let's assume that government is honest (sorry, I threw up a little) and does it's due dilegence in collectinge, analyzing, and reporting these numbers.  How accuracte can these numbers be?  What is the error involved?  As an economic layman, it doesn't seem possible to collect data for an entire country as big as the US and make rational decisions based on them.  In this respect, central planning is fucked (and not to mention in direct violation with any principle of individual liberty).     

Tue, 08/05/2014 - 10:28 | 5048643 yogibear
yogibear's picture

The mutual fund managers believe the numbers. They all read from the same script.

Tue, 08/05/2014 - 10:50 | 5048778 icanhasbailout
icanhasbailout's picture

This is the sort of action you'd see if you were driving a Ferrari down the interstate at 185 mph and accidentally downshifted from 4th gear to 1st instead of 3rd.

Tue, 08/05/2014 - 10:12 | 5048563 RiskyBidness
RiskyBidness's picture

Sell the fucking rip!!  

Tue, 08/05/2014 - 10:15 | 5048568 101 years and c...
101 years and counting's picture

they finally figured it out.  if you're going to just make shit up, why not really exaggerate?

Tue, 08/05/2014 - 10:17 | 5048589 Sudden Debt
Sudden Debt's picture

It's to show to Russia and the world that Russian sanctions can't hurt America...


Tue, 08/05/2014 - 10:15 | 5048570 Sudden Debt
Sudden Debt's picture

if the industry is that good... why does silver keep getting knocked down?...

man... I'm going to cry here...


Tue, 08/05/2014 - 10:19 | 5048598 valley chick
valley chick's picture

Don't cry....BUY...BUY...BUY!!!!!

Tue, 08/05/2014 - 10:22 | 5048621 Sudden Debt
Sudden Debt's picture

I've got 20K in calls 20$ october that just evaporated... It's like somebody broke my back here...

Tue, 08/05/2014 - 10:15 | 5048572 Dr. Engali
Dr. Engali's picture

ISM Services smashed expectations and surged to Nov 2005 highs (from 4-year lows just 4 months ago - volatile?) 



Oh good, moar burger flippers, lawn mowers, and pool boys..

Tue, 08/05/2014 - 10:16 | 5048575 ejmoosa
ejmoosa's picture

It's obvious to everyone but the data collectors that the data collection is broken.

Reminds me of the Army Corp of Engineers and Lake Lanier.  They replaced the device that measured the lake level.  The residents constantly told them it was wrong.  They ignored it and let out millions of extra gallons of water during a drought.

Care to guess who was right?

Tue, 08/05/2014 - 10:41 | 5048719 PartysOver
PartysOver's picture

I sold my Lake house on Lanier just before that.   The Lake Homeowners Assoc new they wer going to get Bent Over but could do nothing about it.  Personally I think the same thing will happen with the markets.  Not if but when.

Tue, 08/05/2014 - 10:15 | 5048576 madbraz
madbraz's picture

fake, fake and fake.


corrupt retards in command = fake data forever to support their BS

Tue, 08/05/2014 - 10:16 | 5048577 GrinandBearit
GrinandBearit's picture


Is there anyone out there who actually believes this crap?

Tue, 08/05/2014 - 10:16 | 5048578 youngman
youngman's picture

I know companies do not change that fast.....its much more linear....something wrong with the survey

Tue, 08/05/2014 - 10:20 | 5048606 ejmoosa
ejmoosa's picture

You are right.  Companies have budgets they follow. They do not flip and flop as rapidly as being reported.

It's as if they know which businesses to survey to get the results they desire, which is what I am sure they are doing.

Need a market boost? Check these businesses....

Tue, 08/05/2014 - 10:29 | 5048647 madbraz
madbraz's picture

they don't survey anyone...


survey's should always come with the contact information for every person surveyed.  that way you could confirm if it is real or BS.  obviously they don't want that.

Tue, 08/05/2014 - 10:16 | 5048585 starman
starman's picture

Printer cartridge condomds and ky jelly.

Tue, 08/05/2014 - 10:18 | 5048588 starman
starman's picture

Forgot the paper sorry.

Tue, 08/05/2014 - 10:18 | 5048593 Ignorance is bliss
Ignorance is bliss's picture

Must be an election year. The current pack of vultures in office stink of desperation.

Tue, 08/05/2014 - 10:19 | 5048596 barre-de-rire
Tue, 08/05/2014 - 10:21 | 5048610 toady
toady's picture

Didn't the Chinese just pull this same scam? Is the U.S. that jealous that they copycat the Chinese? Probably just not smart enough to come up with something original.

Tue, 08/05/2014 - 10:28 | 5048618 foodstampbarry
foodstampbarry's picture

I do contract work at a car battery plant and things are the slowest they've been in decades. Car batteries being sold is a pretty good indicator of how the overall economy is doing and it's complete shit.


Tue, 08/05/2014 - 10:24 | 5048630 TabakLover
TabakLover's picture

If the Fed is the #s manipulator..........why would they want this?   Seems to me it would put more rate hike pressure on them.

Tue, 08/05/2014 - 10:31 | 5048654 PlusTic
PlusTic's picture

We are all fukked until we get these criminals at the FED outa there...by whatever means necessary!

Tue, 08/05/2014 - 11:20 | 5048935 Fred Hayek
Fred Hayek's picture

Just guessing (it can be hard to understand how sociopaths like those at the Fed think) that they think pretending that the economy is fine as they pretend to finish QE will let them say that it worked and that the crash they let happen when the false flag event comes along was solely due to that false flag event.

Tue, 08/05/2014 - 10:41 | 5048656 Bill of Rights
Bill of Rights's picture

So someone got the ISM data early I see, its good to be king.



Tue, 08/05/2014 - 10:32 | 5048659 viator
viator's picture

Our local mall is in slow decline as AAA rated tenants close and leave one after another to be replaced with local businesses like nail salons; or showrooms with lawnmowers, tractors, or power boats; or just remain empty.

Tue, 08/05/2014 - 10:36 | 5048678 NoWayJose
NoWayJose's picture

I see the same thing in many cities and towns - from malls to empty restaurant shells that resemble their former glory.  But I suppose no one in these cities gets to participate in those consumer confidence surveys.  I do see some pockets of 'success' -- usually new bank buildings, health care facilities, or car dealerships....

Tue, 08/05/2014 - 10:43 | 5048737 yogibear
yogibear's picture

Your not alone. I see a number of strip malls that are at least 60% vacant.

Perhaps the Federal Reserve can push to replace these empty strip malls with empty banks. Seems like there are more and more banks replacing businesses. 

Tue, 08/05/2014 - 11:13 | 5048895 GrinandBearit
GrinandBearit's picture

It's the same where I live... local strip malls and regular shopping malls... LOTS of vacancies. 

Tons of empty commercial office space too. 

Tue, 08/05/2014 - 10:32 | 5048664 NoWayJose
NoWayJose's picture

Don't orders 'surge' every July?  Retailers have to place their orders now for Christmas merchandise so that there is time to make, ship, and distribute those artificial trees, perfumed gift sets, and lead-painted toys...

Tue, 08/05/2014 - 10:34 | 5048675 yogibear
yogibear's picture

"indicator of how the overall economy is doing and it's complete shit."


And all the Federal Reserve and the govenment have left is BS.  They shot their load.  The Fed is loaded with US treasuries they purchased with printed dollars.

Tue, 08/05/2014 - 10:45 | 5048747 disabledvet
disabledvet's picture

Still long and strong the treasury complex...time to rotate out of value and into growth. "Let's see how cheap they really can get that oil out of ground and still make a fortune."

Tue, 08/05/2014 - 11:28 | 5048985 orangegeek
orangegeek's picture

PMI, ISM, Jobs - all bullshit


when yellen gets out of the markets in October (her latest promise), markets will tank


in the meantime, the word is out - publish bullshit data and pull as many bagholders in as possible

Tue, 08/05/2014 - 13:58 | 5049947 robobbob
robobbob's picture

----yes, things are booming. I've never had it so good

---total BS. economy is on verge of cratering


my useless 2 cents

in the last 3 months, 2 big local employers in the construction sector just went under. hundreds are in the process of being layed off.

local suppliers are all saying things are down, down, down, and this is the busy summer season

anecdotal? yes. but if most on ZH have similar stories, you can be pretty convinced the ZH survey tells it like it is.

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