{"id":1679,"date":"2020-03-04T13:36:11","date_gmt":"2020-03-04T18:36:11","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1679"},"modified":"2020-03-04T13:36:11","modified_gmt":"2020-03-04T18:36:11","slug":"february-nonmanufacturing-activity-and-private-sector-jobs","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1679","title":{"rendered":"February NonManufacturing Activity and Private Sector Jobs"},"content":{"rendered":"\n

KEY DATA:<\/strong> ISM (NonMan.): +1.8 points;\nOrders: +6.9 points\/ ADP: +183,000; Large Businesses: 133,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cGoing into any potential coronavirus\nslowdown, the economy is in good shape.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  Last week I noted that the potential for a\nrecession depends upon the strength of the economy going into a possible coronavirus\noutbreak<\/em><\/strong> and the extent of any outbreak in this country.   As we\nsaw last week and now this week, the current state of the economy is\ngood.  While the Institute for Supply\nManagement (ISM) reported yesterday that manufacturing activity expanded a little\nslower in February, today it pointed to continued, even growing strength in the\nnonmanufacturing portion.<\/em><\/strong>  The\nISM NonManufacturing index rose decently led by a strong increase in new\norders.  Hiring improved and order books\nfattened.<\/em><\/strong>  If we weren\u2019t facing a\npotential virus-driven slowdown, I would be saying the economy might be poised\nto grow faster. <\/p>\n\n\n\n

As for the job market, it too looks like it is still\nin very decent shape.<\/em><\/strong>  On Friday we get the\ngovernment\u2019s take on payroll gains, but today ADP weighed in with its estimate of\nprivate sector job growth.  It was\nactually pretty good.  <\/em><\/strong>The warm\nweather allowed construction activity to flourish and job gains in that sector\nwere solid.  The one disappointment in\nthe report was the relatively modest gains in small and mid-sized companies.  Most of the growth has been coming from\nlarge companies and while there is nothing wrong with that, we need the smaller\ncompanies to join in.  They are usually\nthe key to continued strong job gains.  <\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  It is\ntoo soon to see much if any impact from the problems in China on U.S. economic\nactivity.<\/em><\/strong>  So the solid and even strong\nFebruary numbers are hardly a surprise. \nBut the spring data should be telling.<\/em><\/strong>  There is a very high likelihood that second\nquarter growth will take a major hit.  <\/em><\/strong>Supply\nchain issues, the slowing of demand in countries dealing with the virus and,\nvery simply fear should all start showing up in the numbers.  The question is how far into this year will\nthe effects last.<\/em><\/strong>  The U. S. may\nhave been slow in reacting, but hopefully that will change.  But as the virus spreads and more\nimportantly, as the death toll rises, which it unfortunately it is likely to\ndo, then human nature will step in.  The\nfear factor is what we have to watch for. \nIt will not only restrict activity but may lead to drastic actions to\ncontrol the epidemic if it becomes widespread. \nIt is at that point the economy would falter<\/em><\/strong> and a\nrecession becomes inevitable.<\/em><\/strong> Of course, if there is no widespread virus\nepidemic, then given the current strength of the economy, we are likely to\nescape a recession, though we still might have a negative quarter.    <\/em><\/strong>   <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ISM (NonMan.): +1.8 points; Orders: +6.9 points\/ ADP: +183,000; Large Businesses: 133,000 IN A NUTSHELL:  \u201cGoing into any potential coronavirus slowdown, the economy is in good shape.\u201d WHAT IT MEANS:  Last week I noted that the potential for a recession depends upon the strength of the economy going into a possible coronavirus outbreak … Continue reading February NonManufacturing Activity and Private Sector Jobs<\/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":[1],"tags":[],"class_list":["post-1679","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1679","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=1679"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1679\/revisions"}],"predecessor-version":[{"id":1680,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1679\/revisions\/1680"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}