US Services Sector Is Thriving. And Also Deteriorating
Bad news: Good news.
The first of this week's sparse US economic data was inconsistent with the notion of a dovish Fed.
Activity in the mighty services sector was more robust than expected last month, according to ISM's survey, which printed 56.5 for November.
That marked a sizable beat to consensus (53.5). In fact, it was nearly a full point higher than the most optimistic estimate from five-dozen professionals who earned the right to guess by spending four years (and one used Bentley Contin
“In fact, it was nearly a full point higher than the most optimistic estimate from five-dozen professionals who earned the right to guess by spending four years (and one used Bentley Continental) on ornate, framed pieces of faux parchment paper signed by the dean of something.”
This is now officially my favorite of your quips!
Yeah, I’m running out of new ways to make that joke. Hopefully I can keep coming up with fresh takes on it.
With a glance at my own faux parchment, it’s not only signed by the dean of something, but also by a president, a governor, and a secretary of something, it’s written in Latin, and uses at least 6 different fonts!
(The gold embossed seal is my favorite part)
But you’re wrong about the Bentley. It was new, not used.
I’ve long thought the Markit (now S&P Global) surveys were better than ISM.
Employment is a lagging indicator. Also the household survey has been far weeker than the payroll survey over the last few months. The divergence if it continues, in times past has been a leading indicator for employment in favor of the household survery. One difference in the surveys is the fact that payroll numbers generally count larger companies- a household view captures a broader picture of the entire economy since it is not dependent on the BLS finding smaller companies to survey for payrolls. Well that is not definitive since it has only been a few months. A couple of more months with household survey lagging would likely indicate employment is a lot weaker than the payroll numbers suggest.
Something like 15-20 years ago I was one of the people called for the household survey. Was it once a month or weekly? I don’t remember. But I do remember it was a PITA because they asked the same question over and over. They would not let me just answer “there were no changes”. Very annoying. But the survey was pretty granular.
An uninformed question: are these two surveys supposed to be measuring the same thing? Or, by way of example only, does S&PGlobal include smaller businesses?