I couldn't resist the drama. This headline is a reaction to all of the misleading headlines of the past week. The stock market is having trouble with this piece of news:
U.S. service industries unexpectedly contracted at a faster pace in July as concern over rising unemployment gripped consumers.
The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, fell to 46.4 from 47 in June, according to the Tempe, Arizona-based group. Fifty is the dividing line between expansion and contraction.
Wow, the mighty U.S. service sector, which makes up a whopping 90% of the economy, 'unexpectedly' contracted. Why is this 'unexpected'? WTF, unemployment is still very high, people still don't have confidence to purchase stuff and we are being told that we are saving more (actually I think people are de-leveraging and defaulting).
I like this quote from the article:
“There are still plenty of problems out there. To declare everything is fine is premature at this stage.”
Here are the details:
Non-Manufacturing ISM Survey July 2009 (click the image for a closer look)