Earlier today, when forecasting the Chicago PMI [8], we warned to "expect another massive beat courtesy of consumers confident that they can have Apple apps, if not so much food, since they still don't pay their mortgages." Sure enough, the economic data is now straight out of China, with the Chicago PMI not only trouncing expectations, printing at 64, on consensus of 61 (the highest since last April when the peak of the liquidity bubble popped and the stock market rolled over), but, wait for it, the Employment index came at 64.2, up from 54.7, which was the highest employment print since April 1984! At this point it is no longer worth commenting on economic data, as between this, the NAR, the consumer confidence, it was all become farce of a blur. we now expect February unemployment to print negative as the labor participation rate slides to 50%, and seasonal adjustments and birth/date fixtures account for 5 million "additions" to jobs. One thing that is sure. There will be no more easing for a looooooooong time. Kiss any hope of more trillions in central bank liquidity goodbye.
PMI employment index: hilarious.
[9]
And the always entertaining survey responses:
- We are hoping that the slow down in new orders experienced in December and January is over.
- Business seems to be picking up in February. January was slow.
- Our business continues to grow. We are expanding production area & buying new equipment. From a purchasing standpoint pricing is going up, service levels from almost all vendors is going down.
- Forecasts seem to be adjusting slightly down. We keep hearing optimism, but still haven't seen it.
- While our business is strong now, some of our customers are slowing down.
- Our Production is down still...not sure why, think the economy has started to affect our business.
- Overall costs are down despite modest increases on some plastic and steel components. In general chemicals have eased, yet there is still much uncertainty on the horizon. Company profits are better than a year ago despite lower than anticipated sales.
- We are seeing pricing uptrending in motors, plastics and rubber related products.
- The transportation industry seems to be improving consistently. Orders continue to be strong and folks in my industry associations are hiring.
Full report here [10]