{"id":1456,"date":"2019-02-05T13:31:36","date_gmt":"2019-02-05T18:31:36","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=1456"},"modified":"2019-02-05T13:31:38","modified_gmt":"2019-02-05T18:31:38","slug":"january-nonmanufacturing-activity","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1456","title":{"rendered":"January NonManufacturing Activity"},"content":{"rendered":"\n

KEY DATA:<\/strong> ISM (Nonman.): -1.3 points;\nOrders: -5 points; Jobs: +1.2 points\/ Markit (Services): -0.2 point<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u00e2\u20ac\u0153The nonmanufacturing portion of the economy\nis still solid, but growth, as expected, is fading slowly.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  While the government data mills try to dig out\nfrom the partial shutdown, the private sector keeps churning out its\nnumbers.  Today we got two readings on the\nnonmanufacturing portion of the economy and both showed continued solid growth\nbut at a decelerating pace.  The\nInstitute for Supply Management\u00e2\u20ac\u2122s NonManufacturing Index dropped moderately in\nJanuary.<\/em><\/strong>  The level tied the\nlowest over the past year.  Of\nsignificance was a sharp slowing in new orders growth.  <\/em><\/strong>On the other hand, job growth\naccelerated and backlogs expanded faster, so conditions are not that bad.  <\/p>\n\n\n\n

Confirming the modest slowdown in the services was a\nsmall decline in the IHS Markit Services Index.<\/em><\/strong>  Yes, there was a drop, but the level remains\nhigh and that indicates growth in this sector is still quite solid.  Indeed, the commentary indicated that demand\nremained strong, though not quite as good as it had been.   <\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  The\neconomy is in very good shape, despite all attempts by Washington to make sure\nthat would not be the case. <\/em><\/strong> The\nmanufacturing sector continues to boom while the moderation in services\nactivity is not particularly great.  But\nas almost every economist has noted, the impacts from the tax cuts can last\nonly so long and we are beginning to see them fade.  It is impossible to determine how quickly the\neconomy will come down from its sugar high, but I doubt it will suddenly\ncollapse and take a nap.  <\/em><\/strong>There\nis still hope that businesses may actually invest more this year.  Of course, with over one trillion dollars in\ncorporate buybacks vacuuming up much of the tax breaks, I am not counting on\nthat happening.  But, we can always\nhope.  Since we will not get the first\nreading of fourth quarter GDP growth until February 28th<\/sup>, we will be\nflying somewhat blind on exactly how well we were doing going into the\nshutdown.  The consensus is for something\nin the 2.5% range, which seems reasonable and representative of the expected\nmovement back toward trend growth.<\/em><\/strong> \nAs for investors, there is the State of the Union speech tonight, the\nsteak dinner meeting of the president and Chair of the Federal Reserve and\ntepid comments about a trade agreement with China to contend with.  Today\u00e2\u20ac\u2122s numbers will likely go largely\nunnoticed.   <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ISM (Nonman.): -1.3 points; Orders: -5 points; Jobs: +1.2 points\/ Markit (Services): -0.2 point IN A NUTSHELL:  \u00e2\u20ac\u0153The nonmanufacturing portion of the economy is still solid, but growth, as expected, is fading slowly.\u00e2\u20ac\u009d WHAT IT MEANS:  While the government data mills try to dig out from the partial shutdown, the private sector keeps … Continue reading January NonManufacturing Activity<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1456","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1456"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1456\/revisions"}],"predecessor-version":[{"id":1457,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1456\/revisions\/1457"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}