QUICK QUILL — Purchasing and credit managers, staffing executives and busy bankruptcy attorneys in the dominant service sector all flag downside risk to February’s Nonfarm Payrolls come Friday. Waning consumer optimism in March, especially for non-investors, suggests the credit cycle may finally be bleeding through to household attitudes. After two material months of labor market dropouts, be attendant to upside risk in the unemployment rate versus a consensus calling for no change.
TAKEAWAYS
- ISM Services Revenues rose to 57.2 in February, a five-month high, but Employment contracted for the second time in three months; further, more service industries reported lower employment than higher for the last two months, suggesting payrolls are at risk for further downward revisions
- QI’s Credit Concerns Index, which aggregates NACM Services Rejections of Credit Applications, Accounts Placed for Collection, and Disputes, registered a -2.0 z-score in February; this level has precedent only in the GFC, when ISM Services Employment was in persistent contraction
- The RCM/TIPP Economic Optimism Index fell 1.1% in March to 43.5, within striking distance of the July 2020 post-COVID trough; notably, investors and non-investors saw their opinions flip, with non-investors seeing confidence drop 2.9% while investors registered a 2.8% gain