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Services ISM Misses Expectations For First Time In 4 Months, First Drop Since September
Unlike yesterday's modest manufacturing ISM beat, today's follow up March Services ISM is out at 56.0, reverting back to the Schrodinger theme so prevalent these days, missing the consensus of 56.8, and down from 57.3 in February, posting the first sequential decline since September 2011, and the first miss to expectations in 4 months. The core New Orders indicator was down from 61.2 to 58.8, still above 50 for 32 consecutive months. The backlog of new orders also dropped from 54.5 to 52.5 Amusingly, despite every energy commodity surging, the Prices index in March somehow posted a miraculous drop from 68.4 to 33.9. The only series that was contracting, and unchanged at 49.5, was supplier deliveries, even as inventories increased once again, from 53.4 to 54.0. And if the ADP report was enough to give traders a headache whether or not more QE is coming, today's final economic data point, refutes the latest jobs strength ahead of the NFP, once again leaving everyone into the dark as to the Chairman's true intentions.
Full table breakdown:
Visually:
Once again none of the respondents has anything to say about price inflation.
- "2012 continues ahead of forecasted pace through March." (Wholesale Trade)
- "February was a great month for auto sales — much better than expected. Forecasted sales volumes for the year are being revised upward." (Retail Trade)
- "Positive year-over-year growth is finally being seen as customers' discretionary spend is up, and overall traffic is increasing as well. Increased investments in marketing promotions and advertising during the past few months have helped improve customer loyalty, evidenced by longer stays and increased frequency of visits." (Arts, Entertainment & Recreation)
- "Companies are seeking professional services to continue efficiencies while positioning for growth, when the top line comes back." (Professional, Scientific & Technical Services)
- "We are starting to see the private sector building again; the money is starting to flow into construction." (Construction)
- "Increasing demand for healthcare services while engaging in a more intense effort to reduce costs universally. [We are doing this] prior to implementation of healthcare reform, which is expected to dramatically reduce revenue by approximately 25 percent." (Health Care & Social Assistance)
Some more details:
The 16 non-manufacturing industries reporting growth in March — listed in order — are: Arts, Entertainment & Recreation; Management of Companies & Support Services; Accommodation & Food Services; Construction; Other Services; Wholesale Trade; Finance & Insurance; Information; Public Administration; Health Care & Social Assistance; Utilities; Real Estate, Rental & Leasing; Retail Trade; Educational Services; Professional, Scientific & Technical Services; and Transportation & Warehousing. The two industries reporting contraction in March are: Mining; and Agriculture, Forestry, Fishing & Hunting.
And so on. We will need to see much more weakness for QE to be unleashed as gasoline futures are, paradoxically, up for the day.
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New orders down, inventory up. Sounds like GM channel stuffing on a massive scale. This is starting to smell like the 1970's.
New car dealer lots stuffed full in my area of the North East.
It's worse. At least in the early 70's we still had a gold standard, Glass-Stegall was still in place, we did not have a massive deficit and could raise rates, fraud was still prosecuted to some degree, and the energetic return on one barrel of oil was still greater than 40 barrels of oil (now it is less than 3). Exponential equations are indeed a bitch.
What will be our growth or recovery "solutions" be now? We can't remove any more barriers to fraud, that was done in the 90's and more recently with the regulatory capture of the SEC and CFTC. Can't raise rates or the U.S. goes bankrupt in real terms and how will we keep funding the wars and pensions? Rock, meet hard place.
"February was a great month for auto sales "
I keep hearing this but I see very few of the new models driving around town. As a matter of fact I was driving aroun yesterday and I was thinking...man people sure are driving some crap around.
"Sales" from manufacturer to dealer.
Sales: manufacturer -> dealer -> govt
Debt -> taxpayers
The inanity of it all is in full display in the Fisker "Karma" story:
http://pjmedia.com/tatler/2012/01/26/a-fisker-karma-car-costs-112000-and...
A "green" project to build fucking sports cars, funding assisted by US taxpayers, manufacture in Finland! Yup, THIS is a sustainable formula! NOTE: nothing against my Finnish friends.
I noticed that on youtube the only places where people are driving New cars in the US are Washington DC and Texas. The tornado coverage from Texas showed a lot of new cars on the road.
Oil and Politics are the only games left in this economy.
The analysts keep saying the average car is now +10 years old and people need to (or want to) upgrade. As if it's a choice for those people... Fckn idiots.
I'm in the market for an old diesel truck and I'm constantly amazed at how much money is dumped into all the newer trucks. Someone had an 2008 Ford F350 diesel 4x4 with a bunch of mods (says $8k worth), 40k miles, with an asking price of $49,000! (recently re-posted with no stated price, desperation setting in) And I'm squirming with the thought of shelling out a couple of grand! So, someone out there is going to find $49k for a truck that's several years old? in this declining market? with these fuel prices? Oh, and in one of the pictures it showed a child car seat in the back (crew cab)- great way to pass on debt to the next generation (odds are that the seller is still making payments, and is likely upside-down).
Anyway, this person, and the one who purchases his truck, aren't going to be buying any new stuff (if ever again).
the Fed put is still on, its the Obama re-election strategy to put the QE front and center so it has maximum positive impact on election day
in the meantime....get gasoline stabilized until november and hammer down gold
lets have some fireworks...this is way too fucking orderly
bernanke.....call me and clue me in to your bullshit so i can profit
ill be your friend
wasn't it just yesterday CNBC was wearing dow 10,000 hats?
I think it's more likely that any comments mentioning inflation were censored from the report. But everyone probably knew that.
In other news, AAPL is the cheapest it's ever been since YESTERDAY! BNOBPOF (buy now or be priced out forever)
Had to laugh at this... APPL is clearly one of the biggest bubbles ever blown, perhaps even bigger than the Dutch tulip bubble? (your avatar tended to make me think of this analogy to the Dutch fiasco)
And tulips don't require coal to operate...
My shorts have grown 5% the last two hours. Chuffed.
I like the recent development to include the link to the source data ZH, thanks for that, and everything else as well. I am going to make a small donation over Easter, your services are indispensable in this crazy world.
PS....Nice sale on in physical gold right now.
some rhetoric about upcoming deflation in healthcare?
is there a bubble in heathcare costs in the US?
who coulda knew?