Slight Beat In Services ISM Ignored Due To Weakest Employment Index Since March 2010; Respondents Uniformly Bearish

Tyler Durden's picture

With everyone focusing on the jobs number this Friday, following today's two contrasting data pieces from the abysmal Challenger layoffs report and the better than expected ADP report, one can see why the just released September Non-Manufacturing ISM, which came in modestly better than expected, in fact brings less than great news. While the overall NMI came at 53, a drop from 53.3, but better than expected 52.8, it is the Employment index that is attracting everyone's attention, printing at 48.7, down from 51.6: the lowest from March 2010, which has offset an improvement in both New Orders and Business Activity. And the kicker, all the responses in the survey were negative across the board with this one taking first prize: "It appears everyone is waiting to see what happens next. No trust in the economy or the federal government to do what is needed."Q.E.D.

More respondents:

  • "Weak consumer confidence and high gas prices are placing downward pressure on retail sales volume." (Information)
  • "Business volume outlook and confidence across many market areas in North America appear to be softening." (Mining)
  • "The 2012 outlook is not optimistic; though we keep hoping for a
    rebound, we see little sign of an improved economy — nothing at least that will spur growth, investment or expansion. Improved investment performance in early 2011 caused us to begin several large capital projects, and although we have broken ground, we cannot help but question if our timing was right." (Educational Services)
  • "Third and fourth quarters appear to be slowing down in order volumes. Uncertainty over U.S. and European economy is causing clients to hold off on new orders." (Professional, Scientific & Technical Services)
  • "Negative forecast for housing market's future leads us to think we will be at current levels of business at best for the foreseeable future." (Wholesale Trade)

Full breakdown:

ISM Services vs Sentiment courtesy of Macrostory's Tony Pallotta

And just Employment:

Full report

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PolishHammer's picture

Well here comes Dual.Mandate.Q.E 3.0

101 years and counting's picture

"No trust in the economy or the federal government to do what is needed."

What is needed?  More money printing and more fiscal stimulus?  The keynesian wet dream combo.

SheepDog-One's picture

'QE' at this point would be less meaningful than throwing a baloney sandwich to hoardes of starving and raging barbarians.

Sancho Ponzi's picture

I found this jewel over at permabull MJ Perry's website (

Quote by Bill Frezza, National Public Radio:

"The business community has become so whipsawed, bludgeoned, and bewildered by the epic incompetence and bloviating hostility of our political leaders that they are keeping their powder dry until they can size up the next set of leaders the electorate foists on them. Fourteen months is not too long to hunker down and hope for change when you consider the cost of getting caught in a cash crunch when the global sovereign debt house of cards comes tumbling down."

SheepDog-One's picture

WTF? What does he mean they have to wait until they can see the next set of 'leaders' the unwashed masses foist upon the business leaders??

YOU business leaders so-called select and choose and pay their way into power! 

MonkeySmoke's picture

Fourteen months is a blink of an eye when you compare it to being completely wiped out in a flash crash by some HFT algo-gone-wrong.

JR's picture

NFIB Small Business Economic Trends, September 2011
Confidence in the future of the economy crashed in August, taking the Small Business Optimism Index down 1.8 points to 88.1. This was the sixth monthly decline in a row. The expansion is officially two years and two months old, but the small business half of the economy is still in the “tank”. Expectations for real sales growth and business conditions were the major contributors to the decline for the second month in a row.

Fewer Small Business Sought Credit in 2010 : The outlook for small business expansion remained bleak for most of 2010 as fewer and fewer business owners sought to access credit; a trend that has continued since 2009.  In its latest report, “Small Business and Credit Access,” NFIB found that the present challenging economic environment has resulted in a reduction in the number of small businesses seeking credit in 2010, and an increase in the number of discouraged borrowers, or those who have ceased attempts at accessing credit.

Small Business Credit in a Deep Recession (PDF)

NFIB's Research Foundation released a new national small business poll that takes a deeper look at what the underlying credit problems are for small businesses. The report, Small Business Credit in a Deep Recession (PDF), shows that access to credit has become increasingly more difficult for a segment of the population and identifies the key contributing factors to the credit problem.

Problems & Priorities
The cost of health insurance remains the top problem for small business in America—-as it has been for two decades.

JR's picture

This is the deliberate takedown and takeover of the United States (and the globe) through massive debt and ultimate bankruptcy.  It’s all in David Rockefeller’s CFR/TC One World Order blueprint.

It’s the banker dream plan; just look at its secret knockout punch…the change to the “chained Consumer Price Index (C-CPI-U) to reflect how consumers alter spending, turning to dog meat instead of steaks, in response to changes in prices  – as Bernanke uses inflation to peel off the value of the dollar and the nation’s standard of  living.

The lower level people take the full economic brunt while the Elites build a fire wall, to protect themselves, so they aren’t hurt.

SheepDog-One's picture

Well the so-called elites THINK they can insulate themselves while they destroy the world.....but who will  build and service their Gulfstreams, tune up and repair their Bugatti's, and grow and prepare their Kobe beef and caviar? 

JR's picture

Absolutely.  I sense in the stirring unrest a people’s uprising against empire.  Democracy has become a mere slogan for one-party rule.  The gubmint’s main excuse? The War on Terror.

The revolt in the M.E. and Europe, IMO, is coming home.


SheepDog-One's picture

Basking in better than expected lowered expectations...the high jump bar is now buried 6 feet underground.

I see the biggest problem they have now is how to lower expectations low enough to beat.

Racer's picture

They simply have negative ones, and then have them so negative that it wasn't as bad as expected

Kina's picture

Don't even bother to check gold and silver prices anymore. Obvious where this rusty old ship is headed. No matter what games TPTB play with gold and silver I will be hanging on to the end.


Eventually the current TPTB may no longer be TPTB. But gold and silver will ALWAYS be gold and silver.


At the end of the day it will be me and all of Asia that has all the gold and silver, thanks US for making it so cheap.

OneEyedJack's picture

Basking in better than expected lowered expectations.

Says it all

kito's picture

stagnant. thats where this country is and where it will be until the massive deleveraging begins. there will be no plunge in any of the numbers as long as our treasury milk is being eagerly lapped up by the bond kittens. until then, its all semantics.

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Finnykins's picture

Guys if you want good presentation of macro data check out Tony does a great job and goes quite unnoticed.

Van Halen's picture

No matter what the numbers are this Friday, TPTB are going to  make damned sure they don't reflect what's really going on.

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