US Services PMI rose from 54.8 in October to 56.1 in November - the highest since May 2015 (but this is a drop from the flash print of 56.5 and 2nd biggest miss against expectations of the year). ISM Services crashed from 59.1 to 55.9 (drastically missing expectations) hovering near its lowest since April 2014. Weakness is across the board with Business Activity, New Orders, Employment, Backlog, Exports and Imports all down. Why is the service economy slipping? Simple, the "Affordable Care Act impacting our business, reducing revenue while increasing cost of care."
US Servcies PMI missed expectations but has only been higher in May...
[4]
But ISM Services collapsed...
[5]
So take your pick!
ISM Services New Orders are tumbling...
[6]
Respondents noted...
"Affordable Care Act impacting our business, reducing revenue while increasing cost of care. Several states consolidating medical/behavioral providers which have impacted existing business negatively." (Health Care & Social Assistance)
"Customers’ outlook on their revenues is softening." (Management of Companies & Support Services)
"Moderate activity level. Some suppliers are providing longer lead times due to their own increased backlog." (Professional, Scientific & Technical Services)
"Conditions are holding steady for a profitable year and 4th quarter." (Finance & Insurance)
"Overall food [cost of goods sold] (COGS) has remained generally lower throughout 2015 due to strong dollar, less exports to other countries and low corn prices." (Accommodation & Food Services)
"Continuing competitive pressure in the grocery retail industry has led to implementation of lower prices across all markets and increased focus and efforts from the organization to reduce cost of goods [sold]." (Retail Trade)
"Q4 retail expectations high, and prep for December peak volumes up in all aspects of staffing, inventory build, and supply purchasing." (Transportation & Warehousing)
"Year-over-year sales for the same month are down 3 percent." (Wholesale Trade)
and across the entire survey, things are weaker...
[7]
Still just keep ignoring the data...
[8]
Manufacturing leads Services into recession.
Charts: Bloomberg
