US Services Add Jobs On Fiscal Cliff Worries

Remember when the US economy was spun as shaking in its boots due to the "threat" from the fiscal cliff? Neither do US services. According to the just released Services ISM, the composite index spiked to a 56.1 print, a big beat of expectations of 54.1, and back to early 2012 levels. The biggest boost? Employment, which soared from 50.3 to 56.3, a jump in 6 points. It would appear that the Fiscal Cliff was an opportunity for financial firms, which were already laying off tens of thousands, to add many more. Or some other such convoluted logic which has become simply laughable now: even the ISM's own Nieves can't figure it out, saying the jump in employment was "surprising." Other components seeing an increase: New Orders up+1.2 to 59.3, and naturally Inventories + 3.0. Declines were recorded in Business Activity, -0.9 to 60.3, Prices down -0.4 to 56.5, Order Backlogs down -4.0 from 53.3 to 49.5, Inventory Sentiment whatever this is, down -4.5 to 58.0, and Imports down -6.5, to 49.0.


The respondents, as amusing as always:

  • "Although our business activity level is the same as a month ago, it is still higher than normal with plans to continue at that rate for the foreseeable future." (Educational Services)
  • "Business conditions are picking up despite the current economic state and the federal budget issues." (Professional, Scientific & Technical Services)
  • "Consumer optimism increased; lower gasoline prices lead to higher retail sales." (Public Administration)
  • "The holidays will slow construction some, but overall business remains about 25 percent ahead of last year. Weather has been favorable." (Wholesale Trade)
  • "Due to the extra week between Thanksgiving and Christmas, we are seeing our customers shopping later this year." (Retail Trade)
  • "Business has picked up significantly during this last quarter of the year." (Transportation & Warehousing)
  • "Preparing for substantial business due to heavier than normal crop forecast." (Agriculture, Forestry, Fishing & Hunting)



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