ADP + ISM + Other Reports = Mixed Bag (More on Way Thurs. and Fri.)

ADP Employment

ADP’s employment increase came in at a LOSS of 40,000 jobs in December. AP said that “the market” predicted +110,000. ADP’s correlation with the official Bureau of Labor Statistics report, which comes out Friday morning, has been looser than you would expect. With all due respect, this just doesn’t seem to mesh with reality (i.e. November ISM reports), but we’ll see.

ISM Manufacturing

The Institute for Supply Management (ISM) Manufacturing Index confounded the experts. In November, it came in below expansion mode after 41 consecutive months of expansion by the barest of margins at 49.5 (any reading about 50 indicates expansion).

AP said that “the market’s” prediction for the index was neutral — 50 flat. Surprise: The actual reading came in at an expansion-mode 51.4 that AP calls a “surprise.” A look at the detail does show that the manufacturing employment component of the index was still in slight contraction mode at 49.2.

Vehicle Sales

Chrysler — down 1% for Dec., down 5% for year
Ford — down 12.8% in Dec., down 7.9% for year; SUV and larger vehicles were down much more for the year (14%) than car sales were (5.4%)
General Motors — down 13% in Dec., down 8.7% for year
Toyota — up over 12% for Dec., up 12.9% for year
Honda — up 0.8% for Dec., up 3.2% for the year
Nissan — up 0.6% for Dec., down 5.3% for the year

Construction spending

It went down 0.2% in November, as the slump in the housing sector was nearly offset by pickups in the others.

Still to Come Thursday

• Factory orders — Expectations are for a 1.5% pickup for November, after a 4.7% decline in October.
• The ISM’s services report for the 86% of the economy that isn’t manufacturing (i.e., this report is a biggie). In November, this ISM report stumped the experts by rising from 57.1 to 58.9 instead of declining as predicted to 55.5. AP says that the reading for December “is expected to come in at” 57.0.
• Retail sales reports from the major players besides Wal-Mart (which had better than expected news yesterday). The early line is that many of them will have less than stellar Christmas shopping season results compared to what they expected a few weeks ago.

Still to Come Friday — The Bureau of Labor Statistics Employment Report (New Jobs and Unemployment Rate). Given the cold water ADP just threw, this one will be interesting.