Amid Jobs Collapse, This Is The Ridiculous Reason Why ISM Services Just Beat Expectations

Amid Jobs Collapse, This Is The Ridiculous Reason Why ISM Services Just Beat Expectations

After a mixed bag from ‘soft’ survey data so far, analysts expected ISM Services to continue sliding lower in December, but instead it shot higher – bucking the trend from Markit’s Services PMI.

  • Markit US Manufacturing PMI rose to 57.1 (Supplier Delivery disruptions breaking their model)

  • Markit US Services PMI dropped to 54.8

  • ISM Manufacturing surged to 60.7 (Supplier Delivery disruptions breaking their model)

  • ISM Services surged to 57.2 (smashing expectations of 54.5) (Supplier Delivery disruptions breaking their model)

Source: Bloomberg

And all of that as ‘hard’ economic data continues to slump…

Source: Bloomberg

The picture from the underlying factors paints a very different picture with jobs tumbling…The ISM’s employment measure fell to 48.2 after showing growth the previous three months.

The pickup in growth at companies that make up the biggest part of the economy is surprising given the increase in coronavirus cases and tighter business restrictions in some states. At the same time, the employment gauge contracted for the first time in four months, showing the ongoing drag in the job market from the pandemic.

However, aside from faster growth in business activity and orders, the overall index was bolstered by a jump in the supplier deliveries gauge.

Similar to manufacturers, lead times at service providers may have lengthened because of pandemic-related disruptions to supply chains… how is that a positive!!!

Tyler Durden
Thu, 01/07/2021 – 10:07

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