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ISM Manufacturing Surges With New Orders At 10-Year High; Construction Spending Jumps Most In Over 2 Years
ISM Manufacturing has risen almost without hesitation for the seven months from the January collapse to new 3-year highs, printing at a dramatic 59.0, its biggest beat in over a year, just shy of the recovery cycle's highs in 2011, roundly rejecting the manufacturing signals heard around the world. New orders grew for the 15th month in a row to the highest reading since 2004! Earlier, Markit's US PMI missed expectations and fell modestly from preliminary data to 57.9, but moved to its highest since April 2010. Construction spending also surged, rising 1.8% (smashing expectations) - its biggest MoM gain since May 2012.
Construction spending continues to flip flop from great to terrible to great etc.
But the story of the day was the ISM index, which following last week's blistering Chicago PMI, just printed at 59.0, well above the 57.0 expected, and up from the 57.1 last month.
New Orders surged to 10-year highs... beware the extrapolators off this high...
But sadly left employment behind once again...
The breakdown:
A sampling of what the "unbiased" selection of ISM respondents said:
- "Business is looking good for food manufacturing. Packaging materials prices are staying in check, minimum wage is up a bit, but manageable." (Food, Beverage & Tobacco Products)
- "The commercial building business is good, our business is up." (Fabricated Metal Products)
- "Overall business conditions are flat. World issues taking a toll on business. Consumers are cutting back on spending." (Transportation Equipment)
- "Overall business is improving. Order backlog is increasing. Quotes are increasing. Much more positive outlook in our sector." (Electrical Equipment, Appliances & Components)
- "Business in the energy sector continues to remain very robust with no signs of backing off in the near future." (Computer & Electronic Products)
- "Demand in the United States is consistent and geopolitics remain a concern." (Chemical Products)
- "International markets are slower due to Euro holidays, political unrest and slowing Chinese markets. North American business off slightly." (Wood Products)
- "Business is strong. Labor is becoming a difficult issue." (Furniture & Related Products)
- "Demand is strong. Numbers are up over last year." (Machinery)
- "Strongest month in years. Business is solid...Awesome!" (Primary Metals)
From the ISM' Holcombe: "The August PMI® registered 59 percent, an increase of 1.9 percentage points from July's reading of 57.1 percent, indicating continued expansion in manufacturing. This month's PMI® reflects the highest reading since March 2011 when the index registered 59.1 percent. The New Orders Index registered 66.7 percent, an increase of 3.3 percentage points from the 63.4 percent reading in July, indicating growth in new orders for the 15th consecutive month. The Production Index registered 64.5 percent, 3.3 percentage points above the July reading of 61.2 percent. The Employment Index grew for the 14th consecutive month, registering 58.1 percent, a slight decrease of 0.1 percentage point below the July reading of 58.2 percent. Inventories of raw materials registered 52 percent, an increase of 3.5 percentage points from the July reading of 48.5 percent, indicating growth in inventories following one month of contraction. The August PMI® is led by the highest recorded New Orders Index since April 2004 when it registered 67.1 percent. At the same time, comments from the panel reflect a positive outlook mixed with caution over global geopolitical unrest."
The main reason for this dramatic beat: a surge in New Orders, which on a seasonally adjusted basis rose to 66.7 from 63.4, the highest number since April 2004. This can be explained by the whopping 38% who responded they are seeing better conditions and just 48% same, compared to 29% Better and 57% same in July. And then there is the infamous seasonal adjustment factor. In short this is how the SA and NSA New Orders look for 2014:
Ironically, employment actually declined from 58.2 to 58.1 despite this unprecedented surge in alleged new orders, the bulk of which is certainly on the back of ExIm bank Boeing orders and subprime funded GM auto construction.
Even more ironically, stocks faded on this great news... we are sure Yellen will have some excuse for why the foot needs to remain to the floor...
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If it's not to the floor then it's in her/his ass !
US Treasury yields spiking higher on this latest excuse for the Feral Reserve to start jacking up rates to save the dollar from extinction:
http://www.marketwatch.com/investing/bond/10_YEAR/charts?ma=1&maval=50&u...
I warned ZH last week when I bought Silver last week for the fist time in over a year. This move was in the cards.
In the future, there will be houses for everyone.
"In the future, there will be houses for everyone."
...and no one able to buy them. Back to work serfs.
We've already built more than we can maintain, are you ready for the talk yet?
a random walk around SoCal reveals absolutely batshit levels of .gov "infrastructure" spending from freeways, road rehab to (continued) mega .edu buildout spending...You've never seen so many mexicans in orange vests in your life
Ebola will put an end to scarcity.
Great news, zh! I tried to splain to the homeless peeples piled under the highway on my way to work the good news and even showed them the charts and they seemed happy about the news.
I also showed the formerly retired 73 yo Walmart Greeter the charts and he was pretty happy about how good the economy is doing.
The overcrowded homeless shelter peeples I stopped by to share the wonderful news with also were pretty excited about how well the manufacturing index is doing. I could tell by the look on their wrinkled sun-burnt hungry faces they were genuienly interested in the news.
Do burgers and fries count as manufacturing?
An American, not US subject.
They must in this if you fake it you can make it economy.
More propaganda.
Does anybody believe this?
doubtful. but, it gives the printers a reason to take a breather for a few months....
Computers don't need news any longer. Financial system is a video game. Nothing to do with the real economy.
what gave it away? it couldn't be the contradiction between 'wood products' assessment and construction spending. cuz no wood is used in construction... at all, ever.
you know they're blowing smoke when they start to sound like Crazy Eddie from Crazy Eddie's Used Cars when commenting on current industry conditions.
"Awesome!"
show me an industry insider who has ever described his industry this way and I'll point out he was a guy who was flipping houses between 2003-2006.
Back to green........ whew, I was scared for a minute there.
So doc what was the headcount for the week I dropped out of the world?
pods
It looks like Fonz decided to take himself out in a drunken blaze of glory. Unfortunately I wasn't on that night to partake, I read his posts after the fact. That's all I know for now. I've been too busy to do more than pop in occasionally.
Can you link which post? I missed all the action.
Too bad if he is gone for good. Awesome poster.
This should take you to the thread. For some reason I can't get the specific comments linked:
http://www.zerohedge.com/news/2014-08-23/putins-chief-integration-adviso...
Hopefully he just takes some time off. I have future sandwiches to collect from him.
Sadly, blog fatigue gets the best of all of us at times.
Cheers and Aloha fonz...
I did a few emails back and forth with him last week (apparently after the dust-up, which I also missed being on vacation). I think it's fair to say he was increasingly dissatisfied spending his time here, long before that little coup de grace.
Send him my best. I did not make fuck all off his advice...however, I saved a bundle.
Class act, that Fonz.
I just thought he was another long-timer on ZH with odd opinions until he nailed the interest rate rise over the summer last year. It was a good call, and I watched more closely after that. If he didn't live so far from me, I probably woulda had a few beers with him by now. But I don't go on the island and he doesn't leave the island.
His last piece of direct ZH investment advice that I can recall, was damned funny for being so dead-on: "In case things get better you should own stawks. In case things don't get better you should also own bawnds."
I'll let him know you asked about him.
Thanks, ND.
Even Gilligan left the Island. You shall have your beers...I can sense it.
Yikes, well at my tequila level a couple of nights I think that I could have lost my virtual head.
pods
Everything is falling apart, repairs are booming ^^
This is going to be EPIC!
This is the rationalization to cover this morning's assault and battery of gold and silver.
It all good, right Kevin?
It looks like the US is very busy replacing the weapons that they gave to ISIS.
So Belgium can stop buying our bonds now???
That's a lot of inventory. Someone should post a link to that article of all the cars sitting in huge lots, waiting to be destroyed.
Must be all the IPOs hiring....they have billions to play with now...and must be building a new mansion or two....got to have a ship too...
Don't forget the plank, that's the best part.
Wow the recovery is going gangbusters out there! So I'm sure the Fed will hold an emergency meeting today to raise rates.
Yes, I can clearly see things have never been better ..... for the top 0.001%.
Just back from FL. Have not seen the local economy booming as it is for the last 10 years.
No sarcasm.
Yep, it going gangbusters on Palm Beach and Jupiter Islands.
Some activity elsewhere, but comparing it to 10 years ago ?
Too many cocktails.
It feels like 2007. I have been getting bombarded with people pushing loans
We traded the economic cycle for the Fed-induced debt boom cycle some years back. We'll keep doing it over and over and over.
We should then see a significant push in inflation and money velocity if that holds true.
Sheep needs more explanation to get sheered!
Polar vortex just around the corner.
Wow, this economy is smoking hot! THis morning I decided to sell all of my extensive gold and silver holdings (metals and miners) and invest in shares of big caps, Tesla, Facebook, Chipotle and a few others. Tired of losing money!
Heres a yellon excuse,,,,,FSOC meeting 9-4-14
http://washingtonexaminer.com/metlife-in-the-dark-as-too-big-to-fail-label-looms/article/2552685#!
MetLife's fate could be decided in two days, and yet the insurer still doesn't know whether it will be declared officially too big to fail.
For more than a year, a regulatory super-group has investigated whether MetLife poses a systemic risk to the financial system if it fails, the way that insurer AIG did in the 2008 crisis.
But MetLife representative Chris Stern told the Washington Examiner that the life insurance company still doesn’t know whether the Financial Stability Oversight Council intends to label it too big to fail and subject it to extra regulation at its meeting next week.
The company could be facing higher capital standards, oversight from the Federal Reserve, and a requirement that it write its own "living will" to plan for the possibility of a bankruptcy.
This contradicts the previous ZH post of PMI blood baths around the world.
Am I missing something?
Amerika the productive!
Maybe Apple is now thinking of going against the grain and will produce iphones in Flint...
That is not good for tax inversions!
Hey Jude, the flowers are coming to Detroit again...
Here is what I have seen going on 20 miles outside of Chicago,
1. Giant precast cement warehouses along the I55 corridor, right next to the giant warehouses that are vacant and were popping like popcorn in 2006-07.
2. No new office buildings, no new factories.
3. Giant precast cement truck terminals, which are again of course right next to the giant truck terminals that are vacant and were popping like popcorn in 2006-07.
4. Strip malls that are within 1 mile of seven year old strip malls that have a 40% occupancy factor.
This is pure fuck you money running out of someone's ass into projects that make no sense whatsoever.
I work for a large building products company and we are running at about 50% capacity due to excessive inventory. We aren't GM so we can't give product away and get bailed out. Real residential demand sucks right now, plain and simple.
I am just a stupid European so forgive me asking but what is it exactly that you manufacture over there ?
Loads of Disney Dollars that fewer and fewer people around the world will want to collect!
This is a validation of the miracle of central bank's (TBTF's) application software. FRAUD is now reality and able to produce substantial physical manifestations.
BTFD bitchez.
A 10 year high? That means a recession is next. Explain the Baltic?
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
Play it again, Sam.
The fundamental things apply as time goes by?
hahahaha................
Dream a little dream.
Dear US Manufacturer, Congrats on being one of the last US manufactuers to exist. This questionaire is for the ISM. Please respond favorably or your opinion will no longer be relevant. Thank for taking the time to respond.
Blue Skies
https://www.youtube.com/watch?v=epRXoS_P0lk
Nothing but!
hehehe ................
Ha! That ISM print should make the lights flicker around this place.
The boy done cried wolf.