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US Services Sector Is Either Crashing Or Booming
Yikes.
The marquee gauge of US services sector activity unexpectedly dove into contraction territory for June, data released ahead of the July 4 holiday showed.
At 48.8, the ISM services headline was nowhere near consensus. Economists wanted 52.5.
June's headline was -- get this -- the lowest since May of 2020, which is to say the worst read on overall US services sector activity since the original pandemic lockdowns.
By (stark) contrast, the final read on S&P Global's services sector ga
Jeez. Who wants to be the Fed when you get that kind of data? Any idea as to what explains the discrepancy? Are they measuring different version of “US Services”? Relying on surveys vs. hard data?
The causal relationship between “consumer confidence” numbers and consumer spending has proven to be close to statistical noise. I’ve wondered what the r-squared of the ISM/S&P data to the actual economy is. They are both SURVEYS, not real data. no?
But I have seen charts with lags imposed which suggest that the ISM/S&P surveys do have some predictive value.
For economic growth, that is. Getting back to reality, how will the numbers influence one-month volatility measurements and the dot plots? What else matters?