The data is getting painfully laughable: on one hand Gallup says unemployment is soaring to two year highs, on the other, the ISM non-manufacturing report just printed at 58.6: for those keeping track, and who enjoy laying along, this was the highest since December 2005, and the 2nd largest two month increase in the index on record. Of course, this means unless NFP tomorro comes at -1,000,000, the Taper is a done deal as the 10 year, which just printed 2.969% and surging, indicate. Stocks continue to do their own thing, blissfully ignorant of the debalce that will take place once the 3.00% yield stops are hit. The good news for bond bulls: this index can only go down from these ridiculous levels.
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The components of the report were so good that one can pretty much ignore them: everything increased, including Production, New Orders, Employment, Inventories, Backlogs, Exports and Imports. Only Prices, conveniently, dropped.
From the report:
"The NMI™ registered 58.6 percent in August, 2.6 percentage points higher than the 56 percent registered in July. This indicates continued growth at a faster rate in the non-manufacturing sector. This month's NMI™ is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.2 percent, which is 1.8 percentage points higher than the 60.4 percent reported in July, reflecting growth for the 49th consecutive month. The New Orders Index increased by 2.8 percentage points to 60.5 percent, and the Employment Index increased 3.8 percentage points to 57 percent, indicating growth in employment for the 13th consecutive month. The Prices Index decreased 6.7 percentage points to 53.4 percent, indicating prices increased at a significantly slower rate in August when compared to July. According to the NMI™, 16 non-manufacturing industries reported growth in August. The majority of respondents' comments continue to be mostly positive about business conditions and the direction of the overall economy."
The full breakdown, which continues to represent some economy, but certainly not that of the US:
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The respondents respond:
- "High demand for products is driving expansion." (Management of Companies & Support Services)
- "We continue to see growth in the retail and wholesale sectors of our business, and expect to see new orders for our products continue to grow as well." (Information)
- "We seem to have a flurry of activity in our pipeline." (Construction)
- "Business orders are up and improving. Still concerned about sustainability through Q4." (Professional, Scientific & Technical Services)
- "Experiencing a strong housing rebound and continued solid performance by the tourism sector." (Public Administration)
- "Conditions continue to show improvement." (Retail Trade)
- "Generally slow, increasing economy." (Transportation & Warehousing)