Two days ago, the Manufcaturing ISM soared, trouncing expectations, in a very perplexing print because as the very next day we learned via ADP that manufacturing jobs dropped by 5,000 in April. Today, however, things are back to normal as the indicator that tracks the far greater component of US GDP: the Services ISM [6], just printed at 53.5, missing expectations of 55.3 wildly, and down from the previous print of 56.0. This was the biggest miss in 12 months, and the lowest print since December; it also printed below the lowest Wall Street forecast. That this should not be surprising to anyone we hope is a given: weak ADP but strong Claims (and now a drop in the employment Index); soaring Manufacturing but plunging Services, China expanding but China contracting, and so on: when we said that "Baffle them with Bullshit" is an official policy we were not joking. Remember: when in doubt ask: what would Schrodinger's cat do?
Lowest print of 2012, and bigest drop since last April:
[7]
Full breakdown:
The always entertaining survey responses:
- "Sales have improved slightly, yet still lag behind pre-recession highs. The hiring freeze has been lifted, but open positions are still being vetted for need, timing of the fill, and so forth." (Public Administration)
- "Business conditions have improved in March and April 2012. We have received more job inquiries and job awards in this period. The increase is about 15 percent." (Professional, Scientific & Technical Services)
- "Current conditions compared to prior year are good. Fuel and food continue to be a challenge." (Arts, Entertainment & Recreation)
- "Business is slowing — and projections for the rest of the year are being lowered." (Professional, Scientific & Technical Services)
- "Business is still ahead of last year, but has leveled off a little." (Wholesale Trade)
- "High price of petroleum/oil driving up costs for all market areas." (Transportation & Warehousing)
And for those who still see commodity deflation everywhere, read em and weep:
Commodities Up in Price
Air Freight; Airfares (4); Anti-Bacterial Hand Sanitizers; Apparel; Asphalt; Asphalt Construction; Auto Parts; Automobile Tires; Beef; Benefits; Cleaning Products; Construction Services; Diesel Fuel (3); #1 Diesel Fuel (5); #2 Diesel Fuel (6); Delivery Services; Food & Beverage (2); Fuel (4); Fuel Products (2); Fuel Surcharges (2); Fuel Transportation; Gasoline (4); Hotel Rates; Labor; Office Products and Supplies; Paper Products; Plastic Bags (2); Plastic Can Liners; Plastic Film (3); Plastic Products (3); Rental Cars; Software Maintenance; Steel; Transportation Costs; 3/4-Ton Pickup Trucks (4X4); Trucks; and #10 Window Envelopes.
Commodities Down in Price
Carbon Steel Products; Cheese; Computer Equipment/Hardware; Copper Based Products; Electricity; and Natural Gas (3).