In 2011 it was Europe's turn to baffle everyone with bullshit. it still is, but now it has added China (whose Services ISM printed both below and above 50 depending on which data one uses, whether Markit or HSBC), and the US, as it is now the turn of the Services ISM to [8]beat expectations and print at 57.3, on expectations of 56.0, and higher than the prior 56.8 - this beat comes just as the market was expecting a major drop in the aftermath of the big manufacturing ISM miss (Goldman was well below the consensus on today's number), and appears to have printed where it did just to keep the confusion about the true state of the US economy in place as Bernanke vacillates whether or not to proceed with QE3 and when. Curiously, the most important subindex ahead of this Friday's NFP data, the employment indicator, showed a decline from 57.4 to 55.7, just to make an NFP beat all that much more 'surprising.' That said, as Bloomberg's Joe Brusuelas notes, this data is stale and does not reflect the recent gasoline price shock, which as of today has regular has at a 2012 high of $3.767 [9], compared to $3.503 this time last year. Elsewhere, and in keeping with the Mfg ISM data, US Factory Orders slid 1.0% on expectations of an unchanged print from last month's 1.4% increase. Finally, stocks are completely unmoved on all of this data.
Services ISM table:
[10]
The always informative respondents' survey :
- "Year-over-year and month-over-month growth continues. Market conditions improved dramatically." (Information)
- "Although customer traffic continues to decline, discretionary
spending per capita is increasing. There is a bit more confidence regarding current economic conditions, spurring on slightly more aggressive marketing to capture new customers and encourage repeat visits." (Arts, Entertainment & Recreation) - "Business is generally flat, but showing signs of improvement." (Health Care & Social Assistance)
- "Bracing for impact of fuel price increases on delivered commodity prices." (Educational Services)
- "Optimism is all around, but sales remain sluggish. Activity shows interest, but market [is] very price sensitive." (Professional, Scientific & Technical Services)
- "Signs are building hat things are starting to settle and business is stabilizing. Although orders aren't increasing rapidly, they are steady and consistent instead of the radical swings of the past two years. We hope that this trend will continue." (Retail Trade)
- "Demand [is] gradually increasing for most business sectors." (Wholesale Trade)
And as for deflation...
Commodities Up in Price
Airfares (2); Asphalt; Copper Products; Crab (2); Diesel; #1 Diesel Fuel (3); #2 Diesel Fuel (4); Equipment Repair Parts; Fuel (2); Furniture; Gasoline (2); Gloves; #2 Heating Fuel; Lab Chemicals; Labor; Lumber; Petroleum Based Products (2); Plastic Film; Plastic Products; Poly Film; Steel Products; Tires — Large; and Wire Mesh.
Commodities Down in Price
Cotton Products; Natural Gas; Paper; and Paper Tissues.
Commodities in Short Supply
Crab (2) is the only commodity reported in short supply.
The number of consecutive months the commodity is listed is indicated after each item.