The barrage of better than expected "everything" is relentless.November PMI comes at 62.6, higher than 58.4 before, and a beat of Consensus 58.5. Highest since April. This also means that the ISM will almost certainly be an upside "surprise" imminently. And with the miraculous outlier print from the ADP it was only logical that the employment index in the PMI would print... lower, from 62.3 to 56.9. No data makes sense anymore, so just buy: after all there is no risk. Fed will bail everyone out.
The largest driver of this outlier print is the New Orders sub-index which jumped impressively from 61.3 to 70.2. Most of the other sub-indices were flat to down even (including a big drop in employment!). New Orders jumped to their highest since March, but it seems very obvious when we look at the seasonality (pre-2008) of the sub-index that August to November tends to see a consistent and positive bias over time as we suspect this is simply pre-holidays ordering.The charts below show the average move by month and then this year's move comparatively.
The last month or two has seen a very volatile time series and it seems very clear that orders were left until the last minute due to economic uncertainty and the bounce in stocks perhaps provided the confidence to get that inventory in. The move in this month's New Orders sub-index looks like a catch-up to the drop of last month in what is a seasonal period and furthermore will seasonally drop away after this into year-end (especially as we have commented on the demand issues that we are seeing post Black Friday in LCD screens etc.).