November 4, 2015

October ISM Non-Manufacturing: 59.1%, Up From 56.9 Percent in September

Filed under: Economy — Tom @ 10:14 am

From the Institute for Supply Management — In a still-mediocre economy, we’re supposed to believe that Non-Manufacturing is on fi-ah (bolds and paragraph breaks added by me):

NMI® at 59.1%

Business Activity Index at 63%
New Orders Index at 62%
Employment Index at 59.2%

Economic activity in the non-manufacturing sector grew in October for the 69th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 59.1 percent in October, 2.2 percentage points higher than the September reading of 56.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate.

The Non-Manufacturing Business Activity Index increased to 63 percent, which is 2.8 percentage points higher than the September reading of 60.2 percent, reflecting growth for the 75th consecutive month at a faster rate. The New Orders Index registered 62 percent, 5.3 percentage points higher than the reading of 56.7 percent in September.

The Employment Index increased 0.9 percentage point to 59.2 percent from the September reading of 58.3 percent and indicates growth for the 20th consecutive month. The Prices Index increased 0.7 percentage point from the September reading of 48.4 percent to 49.1 percent, indicating prices decreased in October for the second consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth in October.

After the slight cooling off in September, the non-manufacturing sector reflected growth across most of the indexes. Respondents remain mostly positive about business conditions and the overall economy.

INDUSTRY PERFORMANCE

The 14 non-manufacturing industries reporting growth in October — listed in order — are: Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Retail Trade; Construction; Management of Companies & Support Services; Information; Finance & Insurance; Other Services; Arts, Entertainment & Recreation; Public Administration; Wholesale Trade; and Accommodation & Food Services. The only industry reporting contraction in October is Mining.

This perfectly explains why GDP growth has been averaging 2.0 percent and at this point is predicted to come in at about that level in the fourth quarter, and that sky-high employment index proves that companies are hiring like mad.

Yeah, that’s sarcasm.

October ADP Private-Sector Jobs: +182K; Prior Months Revised Down by 14K (See Conference Call Notes)

Filed under: Economy,Taxes & Government — Tom @ 7:15 am

Predictions: Per Yahoo’s economic calendar — 180,000 to 185,000 additional private-sector jobs.

The report’s home page is here. October’s report will be released at 8:15. I intend to be on the 8:30 conference call.

HERE IT IS (primary October link): “Private-sector employment increased by 182,000 from September to October, on a seasonally adjusted basis.”

From the press release:

… Goods-producing employment rose by 24,000 jobs in October, representing the best month in this sector since January of this year. The construction industry added 35,000 jobs in October, roughly matching September’s gain. Meanwhile, manufacturing remained in negative territory losing 2,000 jobs in October after shrinking by 17,000 in September.

Service-providing employment rose by 158,000 jobs in October, down from a downwardly revised 182,000 in September. The ADP National Employment Report indicates that professional/business services contributed 13,000 jobs in October, less than half the September number.

Trade/transportation/utilities grew by 35,000, off slightly from the previous month. The 9,000 new jobs added in financial activities were the fewest in this industry in the last six months.

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth as measured by the ADP Research Institute is not slowing meaningfully in contrast with the recent slowdown in the government’s data. The economy is creating close to 200,000 jobs per month. Job gains are broad based with energy and manufacturing alone subtracting from the top line. Small businesses, in particular, are contributing to the labor market’s solid performance.”

Prior-month revisions: ADP’s figures for June, July and August are now 169K, 182K, and 190K. Last month, they were 169K, 186K and 200K, indicating a net downward revision of 14K.

CONFERENCE CALL NOTES:

(“Sophia C” — didn’t catch full last name — is covering the report in Mark Zandi’s place.)

Sophia: Job growth relatively stable.

ADP has held up well compared to BLS. Job growth stronger in goods-producing. Construction added 35K, mfg was down 2K.

Moderating growth in private services. Business confidence in this are has been shaken recently.

Internationally focused cos aren’t doing so well. Domestically focused companies are relatively strong. “Healthy consumer balances sheets, rising household net worth” driving hiring in companies dependent on consumer spending.

Small biz +90k are doing well; they serve domestic markets primarily.

Small bizzes — many are construction companies, which did well in October. Driven primarily by residential construction spending but still focused on multi-family, expect to get into single-family.

Questions:

ME (re BLS weakness vs. relative ADP strength): ADP isn’t constrained by sampling problems, because it works from its entire base of client payrolls; believes BLS will be stronger in Oct. and come in at about ADP’s level, and that prior months will be revised upward.

Mine was the only question.

Wednesday Off-Topic (Moderated) Open Thread (110415)

Filed under: Lucid Links — Tom @ 7:05 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: Pope — if you don’t serve others, then what are you living for?

Filed under: Positivity — Tom @ 7:00 am

from Vatican City:

Nov 3, 2015 / 05:54 am

Though letting go of yourself and living for others can make you seem weak in the eyes of the world, Pope Francis said that this is the purpose of our lives, and that in the logic of God, it’s what makes us truly victorious.

“Whoever serves and gives, seems like a failure in the eyes of the world. In reality, it is exactly in giving their life that they find it,” Francis said.

A life that “takes possession of itself, losing itself in love, imitates Christ” in defeating death and giving life to the world, he said, adding that “whoever serves, saves. On the contrary, those who don’t serve have no reason to be alive.”

On Nov. 3, Pope Francis offered Mass in St. Peter’s Basilica for all the cardinals and bishops who have died throughout the year. In his homily, he said that one’s life ought to be spent imitating Jesus’ example of humble service and self-giving, rather than focusing on one’s own needs and interests.

Jesus came not to be served, but to serve and give his life as a ransom for others – and he did it out of love, the Pope said, quoting the Gospel of Matthew. …

Go here for the rest of the story.