Hmmm....

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 54.7 percent in November, 0.5 percentage point higher than the 54.2 percent registered in October. This indicates continued growth at a slightly faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 61.2 percent, which is 5.8 percentage points higher than the 55.4 percent reported in October, reflecting growth for the 40th consecutive month. The New Orders Index increased by 3.3 percentage points to 58.1 percent. The Employment Index decreased by 4.6 percentage points to 50.3 percent, indicating growth in employment for the fourth consecutive month but at a slower rate. The Prices Index decreased 8.6 percentage points to 57 percent, indicating prices increased at a slower rate in November when compared to October. According to the NMI™, 11 non-manufacturing industries reported growth in November. Respondents' comments are mixed; however, the majority of survey respondents reflect a cautious optimism about current economic conditions."

Employment, my friends, employment.

That's the only place that's bad, but it's really, really bad, dropping to just barely positive.

This is both non-manufacturing and manufacturing now; note that non-manufacturing is the majority of the economy by far, but with manufacturing negative and services just barely over the zero line my look at the NFP for +50k looks good and might be aggressive.

There are positives though -- new orders were up and prices dropped back.  That's a good combination, and backlog improved from slightly contracting to growing.

The market originally seemed to like this number but then dropped back -- I wonder if someone bothered to read beyond the headline this time and contemplated what the employment number means.

Analysts will blame the employment sag on Sandy, but I'm not buying that.  The softness indications have been there for more than six months at this point in my leading indicator set (notably the regional fed indices) and as such that the ISM employment figures are now reflecting what leading indicators had foretold is coming to fruition does not surprise me one bit.

When the recession is formally proclaimed early next year you'll hear "nobody saw it coming" along with various elements of the blame game aimed at this or that.

The fact of the matter is that it's quite a bit simpler -- the "tools" used to cover up the stinking dead fish are now becoming permeated with rotting fish guts and thus are no longer effective.