Tuesday, February 5, 2008

"This is a stunning fall"

From Bloomberg:

Feb. 5 (Bloomberg) -- U.S. service industries unexpectedly shrank in January at the fastest pace since the last recession as the housing slump deepened and consumer spending cooled.

The Institute for Supply Management's non-manufacturing index, which reflects almost 90 percent of the economy, fell to 41.9, the lowest since October 2001, from 54.4 the prior month, the Tempe, Arizona-based ISM said. A reading of 50 is the dividing line between growth and contraction.

"This is a stunning fall,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. "If accurate, it's dire news on the economy.''

The momentum of reality is starting to wash across the landscape. The economy is in rough shape, credit is getting tighter, all sorts of loans are going bad, the labor market is weakening, and its the middle of winter!

I like how this article is framed as if this number was as surprise - I mean what the hell were they expecting?