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US Manufacturing PMI Weakest Since Jan, ISM Beats, Construction Spending Spikes Most In 3 Years
US Manufacturing PMI dropped to its lowest since January (54.0 May vs 54.10 April) but rose modestly from early month preliminary indications. So despite the harshness of the winter weather and the port strikes, US manufacturing is worse now than at any time since the peak of piss-poor-weatheriness. New orders rose at the weakest pace since Jan 2014 and input costs rose, and Markit suggests The Fed wait on rate hikes and despite Bill Dudley's utterances, Markeit notes the "survey provides further evidence that the strong dollar is hurting the economy." Against this weakness, ISM Manufacturing - in all its seasonally-adjusted glory, rose and beat by the most since Oct 2014 with new orders rising (umm?) and prices paid surging. And finally, construction spending - having not risen for 3 months - it recovered considerably, spiking 2.2% MoM - the most in 3 years.
US Manufacturing PMI weakest since January 2015...
Markit is imploring The Fed to stay easy... Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said:
“With manufacturers reporting the smallest rise in new orders since the start of last year, the survey provides further evidence that the strong dollar is hurting the economy. Falling exports and slumping profits were two weak links in the economy during the first quarter and look set to act as ongoing drags in the second quarter.
“While the economy still looks set to rebound from the decline seen in the first quarter, the extent of the second quarter recovery therefore remains highly uncertain and could well disappoint.
“It is encouraging to see employment growth holding up so well, with May seeing an increased rate of job creation in the manufacturing sector. But employment can often be a lagging indicator and payroll numbers will inevitably come under pressure if order book growth fails to improve in coming months.
“It therefore remains too early to take a reliable reading on the health of the economy and the data flow over the summer will be crucial in determining the timing of the first Fed rate hike.”
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But on a global basis the PMIs appear to be mean-reverting - in their seasonally-adjusted magicness...
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Back to the US and ISM Manufacturing ignored PMI and jumped, beating expectations by the most since Oct 2014
Respondents noted:
"Economy is showing signs of improvement." (Food, Beverage & Tobacco Products)
"Automotive is still strong. However, steel prices have dropped due to overcapacity and the strong US dollar." (Fabricated Metal Products)
"Overall business is steady. Employment in this area is up, a good sign." (Transportation Equipment)
"Strong spring demand in agriculture." (Chemical Products)
"The exchange rate on the dollar is hurting our sales in Asia. The conversion rate is lowering our profit in Europe where we sell in Euros." (Computer & Electronic Products)
"Sales are starting to stabilize and show improvement from prior months, Year to Date (YTD). Concerns still exist with the overall economy." (Apparel, Leather & Allied Products)
Continued challenges in markets related to oil and gas industries." (Miscellaneous Manufacturing)
"Oversupply is continuing to tighten profit margins." (Wood Products)
"West Coast port issues have eased up and our incoming imports are flowing again." (Machinery)
"Chemicals pricing seems to have bottomed and is slowly rising again." (Plastics & Rubber Products)
For some context... New orders dropped in reality but were seasonally adjusted to an increase!
And finally Construction spending.. spiked by the most in 3 years... which has not ended well previosuly...
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Finally, we leave you with this...
The biggest diveregnce on record.
Charts: Bloomberg
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Forget that! The real news is;
Kim Kardashian Is Pregnant!
What lovely charts, gotsta luv me some bright red coloUrs.
They do tell a couple of stories as I see it...
1) Factories are still closing (I guess with Boeing's threat to leave, even the MIC is willing to go off-shore)....really bad news. Guess whaere mfg , especially in defence is booming? Yup, ISRAEL! Sure you got that instinctively, right? And guess who is BUYING BUYING? India, caught in the USRAEL vice with the UK dancing atop.
2) Construction is probably re-booming due to construction friendly weather (I'm sure this is SEASONAL, they will not adjust when it suits them) and the steep drop in Lumber, Doctor Cu etc.
Now when is the CONfiDUNCE NUMBer out? How confi are the DUNCES, that really moves these ALgos, donnit?
I was a dunce once too, then I kicked TeeVee in it's nuts.
15 years of no TV = @ 2 hrs a day.... 11,000 hours to try and find a new way to play the guitar, so I could be freeeee...appreciate all hedger comments et. al. here and there...
https://www.youtube.com/watch?v=wzESrhRrkTI
They think more of what they've been doing to the economy will make things better if we do more of it because its been great(for some people)......
The real news is that the Supreme Court has ruled you don't go to jail for saying mean things on Facebook. One more key plank of the Obummer administration's war on American rights bites the dust.
WASHINGTON (AP) — The Supreme Court has thrown out the conviction of a Pennsylvania man accused of making threats on Facebook.
The justices ruled Monday that it was not enough for prosecutors to show that the comments of Anthony Elonis would make a reasonable person feel threatened.
Elonis was prosecuted for making illegal threats after he posted Facebook rants in the form of rap lyrics about killing his estranged wife, harming law enforcement officials and shooting up a school.
Elonis claimed the government had no right to prosecute him if he didn't actually intend his comments to be threatening to others. But the Obama administration said that the test is whether the comments would strike fear in a reasonable person.
2 + 2 = 5...
Love how the seasonal adjustment on new orders makes the number MORE volatile. Well done, gentlemen. Can I interest you in DOUBLE seasonal adjustment? It's all the rage these days.
With a side order of fudged numbers and the magic trick is complete!
Construction spending is up in Spring, imagine that.
Being funded by debt of course. "If you build it they will come." Sometimes.
Anyone else notice empty space? In the Intermountain West a whole lot of empty retail/office space.
My weather sentiments exactly up above ebw.
While I am far away physically, I'm working with an American company and am quite amazed at how clue-less most seem to be. As if all was well and swell as you could tell.
Makes me think that the sheep live in a massive potemkin mirage cast by TV...
Between the Ponzi scheme that is concentrating wealth, and the flood of low wage earners washing across our shores and swamping our borders this has only one possible ending.
I read the other day that Paul Craig Roberts stated that what you see is what you get... There is no one in the background pulling the levers, just a bunch of short sighted, greedy, sociopaths driven by expediency.
I don't know which is worse... the ship is heading for the rocks either way, whether it is rudderless or the Captain has been too long at the helm and has come to believe he is god.
I tend to believe the truth is somewhere in the middle. There is no question there are folks with master plans... you have to look no further than the homogenization of the West to see that... the destruction of culture and identity leaving folks directionless and pliable and ripe for plunder and
exploitation.
Then there is an almost palpable demonic presence... I think at this point
almost everyone senses it... call it what you will... that subsumes the worlds processes giving them a kind of cohesion and intelligence.
But against this backdrop a plethora of two bit thieves, who either do not understand or don't care that when the ship finally flounders they are going to come apart in the wreckage along with the rest of us, who are not so much rearranging the deck chairs, but rather have purloined them and stuck back to their staterooms.