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About That Seasonally-Adjusted Soaring ISM Number
Moments ago, the Institute for Supply Management, reported some blistering numbers in the August Non-Manufacturing Report, whose headline print rose once again, this time to 59.6, or the highest since August 2005. Not only that, but the all-important employment component, ahead of tomorrow's NFP report, which also rose to 57.1, printed at what, at least on the surface, was the highest number since February 2006!
Superficially, this is great news. And yet, remember: this is the seasonal-adjustment challenged ISM, the same ISM which for some inexplicable reason believes that survey responses (not hard, or soft data), have to be seasonally adjusted.
So what happens when one looks below the seasonally-adjusted surface. Well, then things get uglier.
In fact, if one looks at the two most important data series that comprise the ISM report, New Orders and Employment, one sees that the number of respondents who reply with "Higher", i.e., are optimistic about current conditions, is actually sliding at the fast pace in a year!
Specifically, the number of respondents who saw "Higher" employment dropped to just 22, a plunge from the 26 in July and 29 in June. This is happening as the actual number, net of seasonal adjustments, rose to, as noted above, the highest since 2006! It was also the lowest number since February when the unadjusted % of respondents seeing "Higher" jobs was at 16.
What about New Orders? Pretty much the same thing: at 29 responding "Higher", this was the drop from the 32% in July, the 31% in June and 36% in May. In fact, a print of 29% was matched for lowest since March of 2014! Quite a bit of difference from a headline, adjusted number which is near the highs of a decade.
So, if for some reason you lose your job because your employer doesn't share the S&P's enthusiasm about the economy, just tell them to seasonally adjust the pink slip to a bonus check - the strategy seems to be working for everyone else, so why not for Joe Sixpack?
Source: ISM
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Does ISM stand for Islamic State Manufacturing? Islamic State Management?
Insert Seasonal Measurements
Thanks again Tylers for keeping it real... it is unfortunate these underlying metrics (soft survey though they may be) don't get widely reported.
That would explain why the number is so high!
No point in commenting the numbers published by "institutions" like ISM and Markit's PMI - these are tailor made to support TBTF primary dealer's positions in interest rate derivative futures markets.
About the only number I have any confidence in right now is the Labor Force Participation number, combined with the percentage of PT workers that would rather be working FT. And perhaps the U6 unemployment number has some utility along the same lines. They show the real nature of the US/economy, and of course they never make the evening news and rarely CNBS. The econ numbers are gamed - corruption/criminality ad naseum.
Barry and his party have to get everything up before the November elections.
please point me to where the decent jobs are as everyone I know complains there simply not out there
There's a critical shortage of nurses for Liberian hospitals these days .....
This report is like splitting pubic hairs.
Spitting them is more fun.
It doesn't need to be believed or even believable. Just accepted as 'truth'.....or at least 'fact'.
Did the government just grew a couple hundred thousand?
Caddilac sales were up as well.
And I thought that only the government manipulated the data. This isn't economics! It's propaganda!
Its all BS and everyone that pays attn knows it....It really doesn't matter as no matter what the Fed and Bankster Algo's will erase any market based reactions and implement the desired Centrally Controlled response. I wonder how long before we are all programmed to consume our Valium on an around the clock basis. Maybe that Memo has already come out and I missed it. Judging from the reactions to all this Propaganda it appears I did. What percentage of us Merkans even register a pulse these days?
As many have mentioned the news will be queued and formatted to the PARTY LINE. All resistance is futile.........
BTW my Etrade has been down over an hour wondering if this is a national issue.....Ruskie Hackers?
Seriously? We're having and argument about seasonal adjustments? Give me a fucking break...