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Service ISM Tumbles To Lowest Since June, Biggest Miss Since 2013, Prices Crash To 2009 Level
Following a disastrous Manufacturing ISM report last week, today it was the turn for its Service cousin to report. And while it wasn't quite the abysmal faceplant that some had expected the seasonally adjusted number to be, printing at 56.2, down from 59.3 and far below the 58.0 expected (but just above the lowest estimate of 56.0), it still was the biggest miss to expectations since September 2013, and the lowest print since June.
And while the details were just as atrocious, with every single ISM component declining in December - something that has not happened since the Great Financial Crisis - a report which literallyh said "Obamacare and wages are still the biggest enemies to profitability", all eyes are focused not so much on the tumble in Business Activity and New Orders, but on Prices, which at 49.5, posted their first contraction since September 2009.
For those asking, here is how New Orders looked like Seasonally adusted and unadjusted:
Finally, and always amusing, were the ISM's goalseeked, and "seasonally-adjusted" responses. These, too, were not compiled using Nielsen:
- "Delays at West Coast ports are requiring re-routing to east coast facilities." (Management of Companies & Support Services)
- "Still struggling with supply of solutions for patient care." (Health Care & Social Assistance)
- "Low oil prices are easing tensions on wholesale prices. Energy exports should be able to boost the economy upward. Obamacare and wages are still the biggest enemies to profitability." (Accommodation & Food Services)
- "Outlook for 1Q 2015 is strong. Up from a relatively strong 4th quarter 2014." (Professional, Scientific & Technical Services)
- "Reduced fuel prices will improve the cash position of the company." (Transportation & Warehousing)
- "We are finishing the year strong." (Wholesale Trade)
- "Another terrific month in the auto industry. Sales are near historic highs." (Retail Trade)
Yup: everything is so great that the other, non-goalseeked and seasonally adjusted Service ISM report just warned that December payrolls will be well below 200,000 and Q4 GDP will tumble by more than half to 2.0%. Golfclap, dear ministry of BS and "truth."
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Just heard CNBC on XM frantically pimping '+10% on the S&P this year, that's all but guaranteed hurry and BTFD!'
Shameless casino hucksters.
Lets party like its Janurary 2008.
Come on everyone, let's POLKA!!!!
and the Dow rallies....
obamacare and wages are still the biggest enemies to profitability". whats being proposed here? no wages? low wages like maybe $1.00 a day? who is left to buy the worthless walmart crap? i am of the belief that executive pay is way off the charts, when you see how they drive their companies into the ground. yet they and theirs are taken care of...for the next several generations....bullshit.
Market is green.
Fully expecting the Federal Reserve's QE 4/QE to infinity to start up again.
This time QE will be at least $125 billion/month? Maybe larger.
The Federal Reserve follows Japan. Print insanely until the dollar dies, then SDRs.
The real question is how much does 1 inch of snow in DC and Virginia shave off of next month's jobs report? Unexpectedly of course.
It was horrible, cold white stuff everywhere...almost 1 inch deep...completely laying to waste the entire economy as far as the eye could see!
And what is the shelf life of this rally on bad news to be?
Apparently only several minutes...all indexes now red LOD.
"Another terrific month in the auto industry. Sales are near historic highs."
Another historic high, the Playa Status Index. Most peoples 2nd major "investment" is something that depreciates by 5% once it hits the asphalt, and continually so thereafter.