Spot the common thread: Chicago PMI, manufacturing ISM, ADP and now Non-manufacturing ISM. If you said all big misses, give yourself a pat on the back. Because in the New Normal, the recovery apparently goes backward and downward especially when funded by what is now some $400 billion in QEternity. Despite expectations of a modest decline from 56.0 in February to just 55.5, the March Services ISM dropped to 54.4, the lowest since August, and the biggest miss in one year, with the critical New Orders components declining by 3.6 to 54.6, Employment down by 3.9 to 53.3 - the lowest since November, and Exports down 4 with imports up 5 surely doing miracles for GDP. Why the big miss? Three reasons: the post Sandy rebuilding effort is over; the abnormally strong winter seasonal adjustments have phased out and now is the time to pay the piper, and of course, the complete collapse in global trade as we have been hammering for the past year, now that Europe is in the worst depression since the 19th century. But don't worry: there is a POMO for that, and for everything else to give the impression that just because the Bad Bank formerly known as the Fed will onboard every piece of toxic garbage that is not nailed down, one can safely ignore reality for ever and ever.
Visually:
[11]
Table summary of the report:
[12]
For those who say no inflation:
Commodities Up in Price
Beef (4); Chicken Products (3); Crab Products; #1 Diesel Fuel* (3); #2 Diesel Fuel (3); Eggs; Food Products; Freight Costs; Fuel (3); Fuel Surcharges; Gasoline* (3); Gypsum Board; #2 Heating Fuel (2); Hotel Rates; Lumber — Pine and Treated (5); Natural Gas; Office Supplies; Pharmacy Products (4); Plywood; Produce; Roofing Products; Roofing Shingles; Transportation Costs; and Waste Disposal.
Commodities Down in Price
Cheese (3); #1 Diesel Fuel*; Gasoline*; and Soy Products.
Finally, the always entertaining respondents:
- "The economy and our business appear to be improving." (Management of Companies & Support Services)
- "Volumes are down slightly, but spending per person is up." (Arts, Entertainment & Recreation)
- "Economy and all of our business units appear to be on track for positive gains this year. It may be a struggle, but economic indicators and signs of business growth point to increased spending from our customers." (Professional, Scientific & Technical Services)
- "Local business climate seems more upbeat as the market moves higher." (Public Administration)
- "Winter weather has affected construction, but the spring building season looks encouraging." (Wholesale Trade)
- "Sales increased 17 percent last year; sales continue to rise this quarter." (Retail Trade)
"Anticipate a plentiful season, requiring strategic planning with packaging inventories." (Agriculture, Forestry, Fishing & Hunting)
Source: ISM [13] [13]