US Services Survey Improves But “Business Confidence Subdued”

US Services Survey Improves But “Business Confidence Subdued”

Following the mixed picture on Manufacturing (ISM spiked, PMI dumped), US Services data was expected to rise for both ‘soft’ surveys.

Take a look down the list and decide which fits your narrative…

  • Markit US Manufacturing PMI 51.9 (down from 52,4) to 3-month lows.

  • Markit US Services PMI 53.4 (up from 52.8) to 10-month highs.

  • ISM Manufacturing 50.9 (up from 47.8) to 6-month highs.

  • ISM Services 55.5 (up from 54.9) to 5-month highs.

Source: Bloomberg

Once again it seems a global pandemic is not enough to spook American business…

The ISM’s measure of new orders at U.S. service providers increased to 56.2 in January from a three-month low. Other details from the report were less upbeat. Measures of employment, order backlogs and exports all softened from the end of 2019.

The improvement in services activity and a rebound in the ISM’s manufacturing gauge show business optimism was building just as the coronavirus epidemic began to exact a bigger toll — both in terms of the growing number of lives lost and economic disruption.

The Markit Composite index rose to 10-month highs at 53.3. Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

The PMI data indicate that the US economy is ticking along at a steady but unspectacular annualized rate of growth of approximately 2% at the start of 2020. Growth has gained some momentum from the lows seen in the fall as the service sector enjoys stronger growth and manufacturing has also shown signs of the trade-led downturn easing. However, factory activity remains worryingly remains subdued, and optimism about future growth across the business community as a whole continues to run at one of the lowest levels seen over the past decade.

Business are concerned by the prospect of weaker economic growth at home and abroad in the coming year, especially with spending potentially being dampened in an election year. Fresh worries are also likely to appear. With the vast majority of the survey data having been collected prior to the 24th January, we’ve yet to see any impact from the Wuhan coronavirus outbreak, but the potential disruption to business and the associated financial market jitters pose additional downside risks to both the global and US economies in coming months.”

But of course, US data is meaningless – it’s all about China liquidity and fake virus data now.

Tyler Durden

Wed, 02/05/2020 – 10:04

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Author: Tyler Durden

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