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Services PMI Surge "Puts June Rate Hike Firmly Back On Table"
Worst. Case. Scenario. Markit US Services (flash) PMI printed an impressive 57.0 (smashing 54.5 expectations), well up from January's 54.2 as combined with the Manufacturing (soft survey data) suggests, according to Markit, that GDP is growuing around 3.0% annualised. Of course both these 'surveys' print positive amid one of the biggest declines and series of misses in US macro data of the last few years. As Markit notes, “The Fed will no doubt be encouraged by the resilience of the economy...and increasingly minded to start the process of normalising monetary policy in June."
Surge...
As Markit reports,
“Stronger growth of service sector activity in February puts a June Fed rate rise firmly back on the table.
“While parts of the East coast have struggled in the face of adverse weather, other regions basked in unusually warm temperatures, boosting business above seasonal norms. Activity levels surged higher and inflows of new business boomed as a result.
“Alongside the upturn signalled by the sister ‘flash manufacturing PMI survey, the improved performance of the service sector in February means the economy looks to be enjoying yet another spell of robust growth in the first quarter.
The two PMI surveys are so far running at a level consistent with at least 3.0% annualised GDP growth. While the overall rate of business expansion has cooled from the surging pace seen in the middle of last year, growth remains buoyant and, importantly, strong enough to drive yet another month of impressive job creation.
“The Fed will no doubt be encouraged by the resilience of the economy in the face of global headwinds such as the Greek and Russian crises, and increasingly minded to start the process of normalising monetary policy in June
* * *
Which is odd given the total carnage in US macro data in Feb...
US macro at 11-month lows... (note that the data cliff-dives at end Sept 2014 - which corresponds with the government's fiscal-year-end)
February...
MISS
- Personal Spending
- Construction Spending
- ISM New York
- Factory Orders
- Ward's Domestic Vehicle Sales
- ADP Employment
- Challenger Job Cuts
- Initial Jobless Claims
- Nonfarm Productivity
- Trade Balance
- Unemployment Rate
- Labor Market Conditions Index
- NFIB Small Business Optimism
- Wholesale Inventories
- Wholesale Sales
- IBD Economic Optimism
- Mortgage Apps
- Retail Sales
- Bloomberg Consumer Comfort
- Business Inventories
- UMich Consumer Sentiment
- Empire Manufacturing
- NAHB Homebuilder Confidence
- Housing Starts
- Building Permits
- PPI
- Industrial Production
- Capacity Utilization
- Manufacturing Production
- Dallas Fed
- Existing Home Sales
BEAT
- Personal Income
- Markit Services PMI
- Nonfarm Payrolls
- JOLTS
* * *
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The June brings the inflation yippie
The fed is no more likely to raise rates in 2015 than Japan was in 1996.
There will be no normalization of rates in Bernank's lifetime, maybe even yours.
“The Fed will no doubt be encouraged by the resilience of the economy...and increasingly minded to start the process of normalising monetary policy in June."
Bernanke said that rates would not normalize in his lifetime. I beleive that is the only thing he ever said that may be the truth.
Oh yes, raise rates!!!! I triple dog dare you!! jump fuckers!
Sitting on 17 triilion in debt..yeah lets raise the rates....lol
I notice there was no year attached to June.
Excellent observation.
"See you in September..."
https://www.youtube.com/watch?v=iu-7DXBiVsA
Lying fucking shysters, they know they can't raise rates without blowing up the whole eCONomy.
No no no they won't increase rates, that would be crazy. They will just talk about raising rates. That's all that's necessary as we've all seen.
The delusions are maintained as the elite carry off all the bacon.
During QE PPI was soaring, and the Fed was saying that it was anomalous and did not represent inflation.
So...
...will they REALLY say now that PPI DOES represent inflation???
I suspect that they are playing chicken with the recession. They know a recession is in the offing. They want to raise rates as a sociological statement to reinforce their credibility...but not enough to subesquently be blamed for the recession.
Okay... I am betting a low-basis point raise in before May...
They'll want to frontrun the visible effects of the coming recession in raising rates...and then have the rate raise be so timid that no one will say they torpedoed the 'recovery'.
As soon as the recession is in print (say between August and October) they'll reverse course, followed by discussions on more QE, with those discussions' volume and publicity in direct proportion to the recession's apparent severity in terms of stock market, jobs, and consumer spending.
The real fact is that they will have to return to QE or the banking system will go bankrupt.
All those stagnant or reversing wage earners will not be able to continue to pay their debts.
The fact is that QE, from now to debt jubilee/currency collapse/banking collapse is a necessity to stave off deflation that is already built-in.
If you'd listened to the dire warnings, before, you missed out on a move of 33% in the S&P.