On the heels of 5 months of weakness in Services PMI, and 2 months of weakness in ISM Services, it only makes sense that ISM's Services print would massively beat expectations at 59.3 (against 57.5). All ISM subindices rose - apart from employment (which dropped to 4 months lows)! Just 15 minutes after one survey indicates a drastic slowdown in domestic demand for services, another one says it has almost never been better...
Huge beat in ISM Services...
What a difference 15 minutes makes...
Here is the full breakdown of the components: magically, and totally unlike that "other" ISM, virtually everything improved except for employment, which as we now know, has been improving purely due to lower wages, something which in an objective world would impact manufacturing survey responses, if not in a goalseeked new normal.
This is what a selection of cherrypicked responses had to say:
- "Business is good with new technology and products." (Information)
- "General uptick in demand/spending." (Finance & Insurance)
- "We are experiencing downward pricing pressures on the price of natural gas as a result of the lower energy prices being driven by OPEC’s lower oil prices." (Mining)
- "Food cost continues to be a challenge due to cost of goods increases. Beef, produce and turkey markets remain high. Chicken, pork and eggs, although year-over-year are higher; prices have fallen from one month ago." (Accommodation & Food Services)
- "Business is strong. Many new accounts want to be implemented before year-end so cost reductions can be included." (Professional, Scientific & Technical Services)
- "We are looking forward to a strong holiday season." (Retail Trade)
- "We are still seeing continued momentum month-over-month with the strongest area being government accounts." (Wholesale Trade)
Perhaps the only informative datapoint is that the saline IV solution shortage which started almost a year ago (as we reported previously) continues:
Commodities in Short Supply
- Labor (3); Medical IV Products; and Medical IV Solutions (11).
As for Labor being in short supply, that should explain why real hourly compensation was just slashed lower and Q3 business and mfg wages were revised to negative.