US Services Economy Catches Down To Manufacturing - Slumps To Weakest In 13 Months

Tyler Durden's picture




 

Following December's disappointing drop in Services PMI data, January's initial print of 53.7 (missing expectations of 54.0) is the weakest since December 2014. It appears the "manufacturing recession doesn't matter" meme was wrong after all. As Markit notes, the survey data paint an inauspicious start to the year for the US economy.

 

Confirming ISM Servcies drop to May 2014 levels, PMI's drop shows that it appears there is a link between an industrial recession and slowing services...

 

As Markit notes, the survey data paint an inauspicious start to the year for the US economy.

A struggling manufacturing economy is being accompanied by a services sector where growth showed further signs of losing momentum in January even before the bad weather hit.

 

“The data are by no means disastrous, signalling a 1.5% annualised rate of economic growth at the start of the year, but the drop in business confidence to one of its lowest levels for over five years suggests that firms are bracing themselves for worse to come. Worries about financial market volatility, the impact of slower growth overseas, a downturn in the energy sector and uncertainty about higher interest rates all took their toll and set the scene for further weakness in coming months.”

 

The data are by no means disastrous, signalling a 1.5% annualised rate of economic growth at the start of the year."

So the silver lining is - it's not a disaster?

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Tue, 01/26/2016 - 10:56 | 7097249 Dr. Engali
Dr. Engali's picture

Nobody has any money, no jobs, and the service sector is shrinking, but it's not a disaster. Idiots....

Tue, 01/26/2016 - 10:58 | 7097256 Winston Churchill
Winston Churchill's picture

More like a catastrophe, so they are sort of right.

 

Tue, 01/26/2016 - 11:04 | 7097277 Save_America1st
Save_America1st's picture

they'll figure out a way how to channel-stuff cheese burgers and burritos eventually, then the numbers will look better. 

 

Helicopter cheese burgers for everyone!!!

Tue, 01/26/2016 - 11:19 | 7097344 ThaBigPerm
ThaBigPerm's picture

They're passing the crack pipe at the trading desks right now.  Do not disturb.

Tue, 01/26/2016 - 11:23 | 7097361 Save_America1st
Save_America1st's picture

If America could just start manufacturing it's own crack pipes again...the recession would be over in 2 weeks.  Damn foreign crack pipe manufacturers taking away good paying American jobs. 

Tue, 01/26/2016 - 11:12 | 7097312 hal10000
hal10000's picture

Both are impacted because they are joined at the hip.  The idea that there would be limited spillover from one into the other seems to be some pretty irresponsible wishful thinking.  If people in the services sector don't make money, they don't buy stuff.  And if people don't buy stuff, then industrials don't make stuff.

Then again, I just have a lowly mechnanical eningeering degree.  What do I know about the intricacies of the economy when compared to someone with multiple Ivy League (puppy mill) degrees?

Tue, 01/26/2016 - 10:58 | 7097257 Kaiser Sousa
Kaiser Sousa's picture

this obviously why the Dow and S&Piss r surging this morning...

Dow 16,000 or bust..........

Tue, 01/26/2016 - 11:01 | 7097269 shutterbug
shutterbug's picture

Definition of words... it seems we invent new or different meanings for words every time they are used.

So Good ... is nowadays ... Bad and the other way around.

Depressions are good economics, Recessions are great, Debt is awesome, and more government is about the best thing in this world.

/sarcasm off

Are there still - some - sane people around?

Silver linings would be good, if real and physical :-)

Tue, 01/26/2016 - 11:02 | 7097274 RadioFlyer
RadioFlyer's picture

You are peddling fiction,sir.  You must hear it from the Horse's mouth:

 

Obama: Anyone claiming America’s economy is in decline 'peddling fiction'

 

https://www.youtube.com/watch?v=PndJjTCDJmw

 

 

Tue, 01/26/2016 - 11:04 | 7097288 starman
starman's picture

Barack Hussein's dick just went limp! Not even Muchelle can help it.

Tue, 01/26/2016 - 11:08 | 7097301 Winston Churchill
Winston Churchill's picture

I may have to use conc. nitric acid to remove that image.

Just as well I have plenty in stock.

Tue, 01/26/2016 - 11:15 | 7097323 RadioFlyer
RadioFlyer's picture

They'll just use MOoch's.

Tue, 01/26/2016 - 11:06 | 7097295 ebworthen
ebworthen's picture

The people not working the oil fields or laid off from banks and Walmart aren't going out for coffee, breakfast, or lunch.

Unicorn trainers and Leprechaun catchers is what we need, there should be a degree program!

Tue, 01/26/2016 - 11:07 | 7097297 Chuckster
Chuckster's picture

Well ...shit!  I thought making drinks was going to make us all rich!  Do am I wrong again?  I bought every word the government told me...I thought we were using European fat asses to grease our economy.  Damn!  What would Jack Burton make of this?

Tue, 01/26/2016 - 11:07 | 7097299 Monetas
Monetas's picture

Sex service sector is .... under reported ?

Tue, 01/26/2016 - 11:10 | 7097306 Monetas
Monetas's picture

Mosks and Islamic Cultural Center construction .... is outperforming ?

Tue, 01/26/2016 - 11:11 | 7097310 two hoots
two hoots's picture

The Fed needed some cover.

Tue, 01/26/2016 - 11:12 | 7097314 Chris P
Chris P's picture

Don't you know this is a jobless, manufacturing-less, service-less, spendless recovery and if you say anthing contrary you are a liar....

Tue, 01/26/2016 - 11:15 | 7097325 Chuckster
Chuckster's picture

Ya know guys.  QE35 would work as long as the world population thinks the dollar is solid.  The minute people loose faith in the dollar...it's game over and bend down ...turn around...pick a bail of cotton.

Obama lying to try and save the economy might have been justified (who knows?).  What are we going to do when he runs the world?  UN chairman appointed by president Joe Biden.  Ref: Larry Nichols (soothsayer and clairvoyant aka Bill and Hillary 30+ black ops adviser) in an interview.

Tue, 01/26/2016 - 11:15 | 7097329 lester1
lester1's picture

Does the Federal Reserve buy stocks? What would stop them?

 

Seems like someone is propping up the market today.

Tue, 01/26/2016 - 11:30 | 7097403 Chuckster
Chuckster's picture

Dear Lester:

The market has been a FED experiment for some time (7 years).  I think Soros is responsible for the bad numbers (he seems to be responsible for everything that can't be laid on Obama's doorstep).  He should be severely horse whipped with a goose feather and have a brand put on his forehead.

Signed Abby

Tue, 01/26/2016 - 12:07 | 7097575 Consuelo
Consuelo's picture

Does the Exchange Stabilization Fund buy $Treasuries...?

 

Does a bear...

Tue, 01/26/2016 - 11:21 | 7097354 commie
commie's picture

So the silver lining is - it's not a disaster?

 

Aw...so sorry, TD. You were probably hoping for really bad news for the USA economy. 

Tue, 01/26/2016 - 11:26 | 7097375 John Law Lives
John Law Lives's picture
Oil CEO’s – Don’t Expect Oil Prices To Recover Until 2017

 

By 
Posted on Sun, 24 January 2016

http://oilprice.com/Latest-Energy-News/World-News/Oil-CEOs-Dont-Expect-O...
Tue, 01/26/2016 - 11:48 | 7097482 Exit through th...
Exit through the gift store's picture

Nothing to see here, move along. Its a buying opportumity!!! Stawks R awesome!

Tue, 01/26/2016 - 11:54 | 7097514 moonmac
moonmac's picture

The one good thing about our new McJob Economy is workers are never more than a 5 mile commute away from their careers at the local strip mall, shopping center or fast food joint.

Tue, 01/26/2016 - 12:22 | 7097651 Bemused Observer
Bemused Observer's picture

The thing about the services economy is that the services still have to be paid for. If the consumer can't afford a 500 dollar phone, he isn't likely to be spending that on haircuts and day spas...

So it is irrelevant whether we are a service or manufacturing economy...both require a healthy consumer-base. Which we do not have.

Tue, 01/26/2016 - 13:50 | 7098177 PoasterToaster
PoasterToaster's picture

The Service Economy is more correctly titled "The Secondary Economy".  The prime mover has always been making things.  And it always will be.

The day they started talking about a Service Economy, the bullshit factor started going exponential.  It was an admission that wealth creation was being offshored.

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