Weather affected jobs; weather affected manufacturing; and weather affected the global outlook for the economy… but weather did not affect the US ISM Services index which modestly beat expectations. However, at 54.0 (vs a 53.7 expectation), ISM Services remain notably below the three-year average and while new orders rose modestly, they remain a smidge above 5 year lows… Today we saw how bad weather is used to explain away the bad January numbers (ADP), but when the number is better than expected, the weather spin is ignored and it is a “reflection of the stronger economy” as was the case with the just released Services ISM number – and that is how you pick and choose the components that fit your narrative… and the tapering trend can continue.
A small beat but well below the average of the “recovery”…
Spot the bounce in new orders…
What the respondents said…
Some of the respondents indicate that weather conditions have impacted their business. There remains a bit of uncertainty about the overall economy for some of the survey respondents; however, the majority feel positive about continued economic growth.
“Slight increase in business being seen currently.” (Management of Companies & Support Services)
“Business conditions continue to improve.” (Information)
“Activity picking up on new-year projects.” (Finance & Insurance)
“All phases of the business seem to be getting stronger and have good first half-year outlooks and booked business.” (Professional, Scientific & Technical Services)
“Sales has shown signs of improvement, but lack a sustained pattern to build confidence.” (Retail Trade)
“Casual dining remains challenging, tends to slow after the holidays.” (Accommodation & Food Services)
“Intense weather in several areas of the country is perceived to have contributed to a slow start in what otherwise is historically a strong month.” (Wholesale Trade)