Following a disastrous Manufacturing ISM report last week [4], today it was the turn for its Service cousin to report. And while it wasn't quite the abysmal faceplant that some had expected the seasonally adjusted number to be, printing at 56.2, down from 59.3 and far below the 58.0 expected (but just above the lowest estimate of 56.0), it still was the biggest miss to expectations since September 2013, and the lowest print since June.
[5]
And while the details were just as atrocious, with every single ISM component declining in December - something that has not happened since the Great Financial Crisis - a report which literallyh said "Obamacare and wages are still the biggest enemies to profitability", all eyes are focused not so much on the tumble in Business Activity and New Orders, but on Prices, which at 49.5, posted their first contraction since September 2009.
[6]
For those asking, here is how New Orders looked like Seasonally adusted and unadjusted:
[7]
Finally, and always amusing, were the ISM's goalseeked, and "seasonally-adjusted" responses. These, too, were not compiled using Nielsen:
- "Delays at West Coast ports are requiring re-routing to east coast facilities." (Management of Companies & Support Services)
- "Still struggling with supply of solutions for patient care." (Health Care & Social Assistance)
- "Low oil prices are easing tensions on wholesale prices. Energy exports should be able to boost the economy upward. Obamacare and wages are still the biggest enemies to profitability." (Accommodation & Food Services)
- "Outlook for 1Q 2015 is strong. Up from a relatively strong 4th quarter 2014." (Professional, Scientific & Technical Services)
- "Reduced fuel prices will improve the cash position of the company." (Transportation & Warehousing)
- "We are finishing the year strong." (Wholesale Trade)
- "Another terrific month in the auto industry. Sales are near historic highs." (Retail Trade)
Yup: everything is so great that the other, non-goalseeked and seasonally adjusted Service ISM report just warned that December payrolls will be well below 200,000 and Q4 GDP will tumble by more than half to 2.0%. Golfclap, dear ministry of BS and "truth."
