We talk a lot about manufacturing input cost inflation, but the fact is the US hasn't been a manufacturing powerhouse for a long time, that leaves the bulk of our economy in the services industry. Consensus for today's ISM was 57.5 (previous 57.5), it came in at 52.8. Below 50 is contraction so we just saw a major drop and are only 2.8 points away from contraction or a recessionary environment in services. Employment was 51.9 so there's a little growth in employment, but it's dangerously close to layoffs. New orders dropped from 64.1 to 52.7, that would be the biggest drop in history!
The culprit, commodities were cited as one and the "volatile" (so we shouldn't count it) price of fuel.
Not a good report and doesn't bode well for the NFP report Friday.
5 years ago
No comments:
Post a Comment