US Services Economy Plummets In December
After reporting that the Manufacturing sector of the US economy collapsed in December, ISM confirmed today that the Services side of the US economy also tumbled in December.
ISM Non-Manufacturing slipped to 57.6 from 60.7, missing expectations of 59.0 to its lowest since July.
This is the 3rd largest monthly decline since the financial crisis.
As ‘soft’ survey data catches down to ‘hard’ reality.
The drop was led by the biggest decline in more than a decade for a measure of supplier-delivery times, as well as a decrease in the gauge of business activity.
The inventories gauge fell by the most since 2016, indicating that stockpiles are still expanding but at a slower pace (not a good sign for Q4 GDP revisions).
On the bright side, new orders rose to a six-month high, but the employment gauge dropped for a third month.
Interestingly, there was little indication in the data of the trade war with China weighing on business: Export orders accelerated, while a measure of imports eased only slightly. Also, a gauge of prices fell to the lowest in more than a year, possibly reflecting a tumble in oil and fuel costs.
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