Unlike yesterday's modest manufacturing [5]ISM beat, today's follow up March Services ISM [6]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:
[7]
Visually:
[8]
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.