Even Without Higher Pump Prices, Supply Building and Demand Faltering

QI TAKEAWAY —  As erratic as the data have been, the consistent themes of rising supply and faltering demand piercing the din of what’s happening in oil prices have us suspicious of any strength in lagged labor data created by individuals whose bias is laughably on display. We would add two fresh flags the housing and service sector in today’s Feather:  Both state sales tax receipts and Indeed job postings have inflected. The curve is reflecting every bit of the leading data. Energy concentration notwithstanding, high yield is not.

  1. Despite ADP seeing job gains of 475,000 in February, 100,000 north of expectations, at 48.5, ISM Services Employment Index turned red for the first time in eight months; only seven of 18 industries were hiring, and 14 saw growth, down from full breadth seen in November
  2. ISM Services Inventory Sentiment has risen to 53.3, well off June 2021’s pandemic trough of 37.2; Real Estate rose from 4th-lowest to 2nd-highest, a surprise given home inventories were a record low 1.6 months in January and UMich Home Selling Conditions are at record highs
  3. BLS jobs numbers continue to see wild revisions, as evidenced by downgrading June and July by 800,000 and raising November and December by 700,000; the final revision to payrolls has also been consistently higher than the first two prints since early 2021
Posted in Quick Quill.