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US Non-Manufacturing ISM Beats Modestly As Employment Index Tumbles To Year Lows
There was a little for everyone in the latest "baffle them with bullshit" economic data report: while the Services ISM popped modestly from the prior 53.5 to 53.7, on expectations of a slight decline to 53.4, something which in itself is bad because it is good, and makes prospects of more outright QE less of a slamdunk, the all important employment index tumbled from 54.2 to 50.8, the lowest print of the Year, and the largest two month slide in the Employment index since March of 2009. Finaly, with half of the Manufacturing ISM indices in contraction territory already, we finally got the first sub-50 print in the Services ISM as well, with the Prices component declining from 53.6 to 49.8: a/k/a contraction, and the biggest 3 month drop in prices paid since December 2008, and the lowest since July 2009.
ISM Jobs component: oops:
The respondents, ebulient for the most part, are in for a very rude awakening shortly:
- "Q2 will be a strong quarter for us; the building market is starting to wake up." (Construction)
- "Increased activity and resources related to projects." (Finance & Insurance)
- "The upswing in consumer confidence has led to increased business." (Arts, Entertainment & Recreation)
- "While we tend to remain optimistic about the economy, our numbers
do not show a surge in activity. It appears consumers are maintaining
their 'let's wait and see' attitude." (Accommodation & Food
Services) - "Business outlook is flat for the remainder of 2012 with emphasis on
cost containment, restructuring and cost-savings projects."
(Professional, Scientific & Technical Services) - "Business is still strong, but we have seen some softening in growth since mid-March." (Wholesale Trade)
Deflation? What deflation:
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Airfares (5); Beef* (2); Copper Products; Corrugated; Diesel Fuel (4); #1 Diesel Fuel* (6); Fuel (5); Gasoline* (5); Lumber; Office and Computer Supplies (2); and Paper Products (2).
and ISM Prices Paid (biggest 3 Month drop since Decmeber 2008 and lowest print since July 2009)...
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Shovel Ready Projects!
Motto: "Take this job & 'shovel' it"!
And just like mfg ISM, new export orders on service side take a big drop................
Non-man ISM lubed up for QE3 and FB $1001. The jobs component alone should have the Bernanker with his middle finger above CTRL - P
Feels like 1933 all over again...
Optimism? I was just let go from the auto dealership (owners were pissed that I brought an instance of fraud to their attention). Anyway, one of the owners told me that the industry outlook and his outlook is for a return to 2008 SAAR numbers. My take is that it, yes, it will be just like 2008. Very few saw the approaching cliff.
Crazy... But I go to this huge upscale gym of about 12,000 members... Huge 'parking lot' is the point I'm driving at (no pun intended)... I swear this parking lot is a lot bigger than many car dealerships...
While walking out to my beatup Ford F-150 last week, I couldn't help but noticing how many brand spanking new cars there were that I passed (most VERY NICE, upscale SUV's & the like ~ something like that grabs your attention ~ Well, at least me, because I haven't carried around a cell phone in 5 years)... It was uncanny, it was like an auto show or something (I thought I'd entered a time warp and entered the body of Robot Trader for a minute)... Somebody is 'out of touch' here, either myself, or a whole tag team of others... It didn't motivate me to change any of my opinions though... Instead, I kept a running tally & tried to figure out how many ounces of gold one could buy with the monthly payments)...
@francis_sawyer
The dealership has been doing very well the last 2 years. My explanation is that most car buyers do not take an "equity view" of the car. We don't so much buy new cars as lease or, if purchasing, "synthetically lease" them. Can you remember when a 60 month car note was introduced? Now we have 84 month deals. Seven years! There is also a lot of low/no interest financing. Toyota had 0% on many models the last two months. Most car buyers love to have new cars and so they are constantly trading and buying and the note is manageable, but never paid off. Think of it like the house flipping craze of 2005. How did that end?
I'd concur 100% with that... I'll guarantee that almost 100% of these vehicles were LEASE jobs... The area is totally populated with federal workers (many black ~ which, before I get junked for that, I only add it into the story to add perspective)... I can only conjecture that the vast majority of ALL these federal workers (notwithstanding race), are under the dubious impression that the economy is doing fine, Obama has his hands firmly on the wheel (in their world), that all they have to do is sit at their desk for 20 years and they'll get a PHAT pension, so why not splurge on a PHAT ride...
Back in the 80's, we would've laughed at anyone wanting an auto loan longer than 24 months.
& people nowadays laugh at 80's style 'Flock of Seagulls' hairdos... (well ~ I guess I can't argue with that)...
Lolz, well there are far more people sporting the reverse mullet these days; laughed at them then, laugh at 'em now. Not sure what that has to do with the trend towards casually borrowing in order to finance what are in effect veblen goods, aside from it looks like we live in a nation of posers with bad hair.
...and the "market" ramps...unfucking real.
Looks like a short squeeze in the US zombie bank brethren (JPM, MS, et al).
Baffle them with bullshit.
Formerly more approriately called NAPalM.
By noon, an AP newsreader will report this as good news, and stations all across the land will dutifully rebroadcast it.
Did you buy some oil or oil services this morning?
I'm almost perfect now...
When I'm SURE it will tank it ramps, and vice versa.
Maybe I should get back in the market!
Just an oversold snapback. Good opportunity to pick up the most beaten down commodity related stuff. I suspect the reaction will be quite weak, but a great trade opp.
It's all about short squeezes and stop hunting now. The algos know the market extremely well and they know exactly when to reverse and catch a little "squeeze wave". They also know exactly when the wave will dissipate. An algo doesn't know much but what it does know it knows very well.
Jobs, or the lack thereof are no longer important to the economy. We simply print more money and distribute it throughout the land. Hundreds years of hard working people trying to just keep their families fed, who knew the solution was so simple?
The only reason the service numbers when higher is that Charlie Sheen has a TV show again, and can afford 2 grams of coke and 5 call girls a night rather than the 1 gram and 1 hooker a night he had been living on...
There are two types of employees that come under the involuntary part-time category: those who are working fewer hours because their present employer cut back hours due to business conditions, and those who just can’t find full-time jobs.
While the number of employees who saw their full-time work schedules cut by their existing employers stayed about even with last month, and declined 8.8 percent from last year; the number of workers who could only find part-time jobs rose about 12 percent to 2.6 million in May, and increased about the same percentage compared to the same month last year.
http://lifeinc.today.msnbc.msn.com/_news/2012/06/04/12049830-full-time-j...
A negative 3.4% in employment and they call the direction as "Growing"?????
The employment is consistent with other indices. But at least ISM isn't negative!
http://confoundedinterest.wordpress.com/2012/06/05/ism-non-manufacturing-index-rises-but-employment-index-falls/
But not falling is hardly something to high five about.
http://www.theatlantic.com/business/archive/2012/06/the-us-economy-isnt-just-a-man-made-disaster-film-its-an-epic-trilogy/258081/