Miraculously, ISM services managed to print a solid upside surprise for December.
I say “miraculously” — it’s hard to know what’s surprising and what isn’t these days. The services sector is obviously vulnerable in any scenario where COVID-19 reasserts itself, which is clearly the case in the US, where the dreaded “winter wave” didn’t just materialize, it came in the form of a tsunami.
But, according to ISM, services sector activity was more robust last month than it was in November. The headline print was 57.2, easily better than the 54.5 consensus expected and ahead of even the most optimistic guess from 53 economists.
This is a welcome development even as nobody will be particularly interested on Thursday given everything else that’s transpired over the past two days. November’s headline print, you might recall, was the lowest since May.
A quick look at the breakdown shows business activity and new orders rose. Supplier deliveries also moved substantially higher, which isn’t always a good thing.
Notably, the employment gauge moved back into contraction territory for the first time in four months.
“Various local- and state-level COVID-19 shutdowns continue to negatively impact companies and industries,” Anthony Nieves, chair of the business survey committee, remarked.
When you think about the decline in the employment gauge, it’s worth doing so in the context of Wednesday’s disappointing ADP report, which showed private employers in the US services sector shedding more than 100,000 jobs in December.
In any event, this is incremental “news,” at best. It’s a mixed report during an NFP week that’s already featured a Senate flip and a literal insurrection in Washington D.C.
So, with apologies to ISM, nobody cares right now, beyond the read-through for workers, and we’ll get a more comprehensive account of that out of the BLS on Friday.
