The downward revision to last month's recent record high appears to have been the warning flag but this is a disaster. ISM Manufacturing dropped by its most since 2008 to levels not seen since May, missed by the most on record, and new orders collapsed at the fastest pace since December 1980. The employment sub-index also tumbled from 55.8 to 52.3. "Poor weather" was blamed by some respondents and still hangovers from the government shutdown but these numbers are simply unprecedented as the data came in at a 6-sigma miss to "economist" expectations.
Surprisingly, even the ISM is sick and tired of the generic excuse:
- ISM'S HOLCOMB SAYS WEATHER DOESN'T ACCOUNT FOR ENTIRE SLOWDOWN
So, one needs to come up with new and improved generic excuses for biggest miss on record:
[2]
6-Sima from smart people's expectations...
[3]
And New orders dropped by the most sicne 1980...
[4]
The full component breakdown with New Orders highlighted:
[5]
The respondents were still hopeful, but scapegoaty, as some were crushed by the lack of balmy 73 degree weather in the deep of winter:
- "We are seeing slight improvements, year-over-year, month-to-month, across most regions and business segments." (Apparel, Leather & Allied Products)
- "Poor weather impacted outbound and inbound shipments." (Fabricated Metal Products)
- "Good finish to 2013, but slow start to 2014, mostly attributed to weather." (Petroleum & Coal Products)
- "U.S. government aerospace business is very brisk." (Transportation Equipment)
- "Slight improvements in defense business. But still lagging from previous years." (Computer & Electronic Products)
- "Cautiously optimistic about increasing volumes but still challenging, and margins remain low." (Chemical Products)
- "We have experienced many late deliveries during the past week due to the weather shutting down truck lines." (Plastics & Rubber Products)
- "We continue to be busy, working six days, 24 hours a day." (Primary Metals)
- "Delays in government product certification due to the partial government shutdown last year are still negatively impacting delivery and inventory levels." (Miscellaneous Manufacturing)
Finally, the Hopium is weak with this one.
- "Restricted optimism heading into Q1." (Machinery)
He must be sent back to the NSA for some reindoctrination.