A Word About that Historic Bounce in US Services PMIs: No, the Service Sector Didn’t Hit New Highs. It Stopped Plunging

One Purchasing Managers Index said services fell further in June, but more slowly; the other said activity started climbing out of the hole. Both agree: Jobs dropped further.

By Wolf Richter for WOLF STREET.

Two US services Purchasing Managers Indexes (PMIs) were released this morning: The broader non-manufacturing PMI by the Institute of Supply Management, which includes industries that are not typically classified as services – such as agriculture, mining (also oil and gas) and construction – and the Services PMI by IHS-Markit, which is concentrated on the major service sectors. Services are dominated by finance & insurance, healthcare, and information/technology. In the US, services account for roughly 70% of the economy. And the data this morning showed majestic bounces.

But what do these bounces mean?

Not what some of the headlines said. PMIs are peculiar creatures. They don’t measure activity in dollars. The surveys ask executives how various aspects of their business changed in the current month compared to the prior month: up, down, or no change. There are no dollars or other quantity measures involved.

The PMIs this morning reflect how these aspects changed in June compared to May: up, down, or no change:

  • PMI value of 50 = no change, same as May; it stopped getting worse.
  • PMI value below 50 = further contraction from May levels; it still got worse.
  • PMI value above 50 = expansion from May levels; it got better but it says nothing about how much further service activity as measured in dollars has to expand before getting back to where it was.

IHS Markit US Services PMI

“June PMI data signaled a notably softer rate of contraction in business activity across the U.S. service sector as many companies began to reopen following the easing of coronavirus disease 2019 (COVID-19) restrictions,” the IHS Markit Services PMI report said, whose PMI value bounced to 47.9 in June – meaning, still in contraction, and still getting worse from May, but at a “softer rate.”

“The marked easing in the rate of output contraction was in part linked to the reopening of service providers and the gradual return of customer demand. The pace of decline was the slowest in the current four-month sequence of decline,” the report said.

So according to this PMI, the service sector may have hit bottom in June. If the July PMI value (to be released a month from now) comes in at above 50, this PMI is saying that the services sector hit bottom in June. If it stays below 50, the moment of hitting bottom and the start of climbing out of the hole will be moved out to at least July:

The Institute of Supply Management’s Non-Manufacturing PMI.

The “Non-Manufacturing ISM Report on Business” bounced to an overall PMI value of 57.1, which means growth in June from historic low activity levels in May and April. So according to this PMI, bottom was hit in May; and in June, the climb out of the hole has begun.

This PMI – or any PMI – is silent on how many more months of growth it will take after hitting bottom to get business activities in dollar terms back to where they had been before the crisis (historic data via YCharts):

Of the 17 ISM non-manufacturing industries included in the index, 14 showed growth in June, compared to May, listed in order of growth:

  1. Agriculture, Forestry, Fishing & Hunting;
  2. Accommodation & Food Services;
  3. Wholesale Trade;
  4. Real Estate, Rental & Leasing;
  5. Health Care & Social Assistance;
  6. Construction;
  7. Retail Trade;
  8. Utilities;
  9. Transportation & Warehousing;
  10. Arts, Entertainment & Recreation;
  11. Information;
  12. Finance & Insurance;
  13. Public Administration;
  14. Professional, Scientific & Technical Services.

And three of the 17 industries in the index reported contraction in June from May:

  1. Mining (includes oil and gas);
  2. Other Services;
  3. Management of Companies & Support Services.

Employers continued to shed jobs in June.

Both PMIs showed that employment did not bottom out in May and that employers continued to shed jobs in June, but they shed jobs at a slower pace.

The IHS Markit report put it this way: “Meanwhile, service providers continued to cut their workforce numbers, but at a much-reduced pace. Although some companies noted that layoffs stemmed from ongoing closures and subdued demand, others resumed hiring as new order inflows stabilized.”

The Non-Manufacturing ISM Report showed that June was the fourth month in a row of employment contraction. Its Employment Index bounced to 43.1, so still far below 50, meaning that employment at those companies was still falling in June, but at a “slower” pace than the catastrophic job-shedding experienced in May.

Of the executives in the survey, only 16.1% said that employment in June was higher than it had been in May at their companies; 58.8% said employment was the same in June as it had been in May; and 25.1% said that employment was lower in June at their companies than it had been in May (historic data via YCharts):

Only three of the 17 industries reported an increase in employment in June:

  1. Agriculture, Forestry, Fishing & Hunting;
  2. Accommodation & Food Services;
  3. Construction.

But 11 of the 17 industries reported a reduction in employment in June, listed in order:

  1. Management of Companies & Support Services;
  2. Educational Services;
  3. Mining (includes oil and gas);
  4. Professional, Scientific & Technical Services;
  5. Other Services;
  6. Retail Trade;
  7. Health Care & Social Assistance;
  8. Public Administration;
  9. Wholesale Trade;
  10. Utilities;
  11. Finance & Insurance.

So here you have it:

The mighty US services sector in aggregate may have, or may still not have hit bottom in June, according the IHS Markit PMI. And the broader non-manufacturing industries in aggregate hit bottom in May, according to the ISM.

But both agree: Employment in June dropped further in the services and non-manufacturing sectors. And this is where the vast majority of Americans are employed — and many of those jobs are well-paid.

These two PMIs are two more indicators that contradict the Bureau of Labor Statistics’ off-the-deep-end jobs report last Thursday. The Labor Department had already contradicted it which said that the number of people on state & federal unemployment insurance jumped to 31.5 million in June, the worst ever. Read… Never Before Have I Seen So Much Fake Unemployment & Jobs Data by the Bureau of Labor Statistics. Labor Department Nails It

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  86 comments for “A Word About that Historic Bounce in US Services PMIs: No, the Service Sector Didn’t Hit New Highs. It Stopped Plunging

  1. Wolf Richter says:

    Dear Readers: New Feature on my Website – the “up arrow” icon.

    After you scrolled down the page, especially if there are a lot of comments, it can be time-consuming to scroll back up to the top of the page. This problem has now been addressed with a new feature: As you scroll down the page, a green “up arrow” icon appears in the right lower corner. If you click on it, the page scrolls back to the top.

  2. Joe says:

    Propping “up” the markets here?

  3. Phoenix_Ikki says:

    You know how this market goes…stop plunging is about as good of news as sharp rebound and V shape by tomorrow. Once again, have to come to this site to get the real scope behind all the ever so rosy headlines this morning.

    Funny how hard the market tries to ignore the undertone of details like below. One has to wonder if it’s like this in June, when majority of the country are rushing to open back up and yet we’re still shredding jobs, now that CV19 is back up in high gear again, how’s Q3 going to look? Doesn’t matter I guess algor aren’t smart enough to read between the lines just yet.

    “Employers continued to shed jobs in June.
    Both PMIs showed that employment did not bottom out in May and that employers continued to shed jobs in June, but they shed jobs at a slower pace.”

    • James Levy says:

      I’ve noticed that most of the Business press has a strange resemblance to sportscasters–they are endlessly hyping the thing they are supposed to be reporting on. In short, they are cheerleaders. It is strange, when so much of the media accentuates the negative, that business reportage is so universally, almost desperately, positive. Crime rates per capita peaked in the USA around 1992, yet you’d never know this by reading a paper or watching a local news broadcast. But give a business reporter a sow’s ear and they’ll tell you it’s a silk purse (the worst culprits are the ones who cover tech).

      • Wisdom Seeker says:

        But of course. All the major media are beholden both to their tech advertisers and to the Google AdMonopoly which writes them checks for every eyeball they can attract, distract and/or infect.

        “Whose bread I eat, his song I sing…”

      • Phoenix_Ikki says:

        Fear sells big time in general news. For business news, hopium is the prescription. More you can pump up optimism, more suckers you can convince to dump money in to get the never ending ponzi going.. Worked so far for RE and stock market sector and work especially in a country that’s so conditioned to live off forever optimism. This help explain the dichotomy you’re seeing in MSM.

      • JDGator says:

        FWIW, Paul Finebaum is the biggest Homer for Nick Satan and the Tide

  4. Petunia says:


    Can you implement and encourage a policy of spelling out acronyms the first time they are used. I find myself looking them up because many have multiple meanings. Thanks for your great site.

    • Tony says:

      A typo “It sopped getting worse”…

      I imagined all kinds of meanings of that marvelous new verb until I realized it was just a missing “t”.

      Another thing about services. We can see from where my brother lives a distant street corner where the Hispanic day laborers gather to await contractors and others picking them up. For years we’ve made a game of counting those visible at a certain time of day and correlating it with the state of the economy. There are very few out there now.

      This means that the jobs in gardening, construction, ditch digging, whatever, that they did, are now being done by citizens, which means that things are more depressed than they seem. Have noticed a lot of gringo gardeners lately, some driving Land Rovers, instead of pickups. How things have changed.

    • Wolf Richter says:

      Thanks. The only proper acronym here is “PMI” which stands for “purchasing managers index.” And I clarified that now at the beginning.

      However, the institutions that produce these PMIs also use letters in their institutions’ names (IHS and ISM), which can get confusing, and so I also cleared that a little.

      • BuySome says:

        I would have been satisfied with “manglers”, but if Jesus is happy, who am I to complain.

      • Phoenix_Ikki says:

        Wolf, really wish you have an ignore button in the comments section. Oh well, at least it’s good to know you’re attracting more visitors on your site, even though it’s probably drawing some of them from the same yahoo posters cesspool.

        • Raymond Rogers says:

          How 1984 of you.

          There are views here I dont agree with, but everyone makes valid points from time to time.

      • John V says:

        Thanks Wolf, my first thought was Prepaid Mortgage Insurance!

    • Market Watcher says:

      Second that

  5. andy says:

    Wolf, feels like the blow off top in the market is happening.

    • Zantetsu says:

      Can you please expand?

      I believe I stated about a year ago that Trump was likely to facilitate short term economic “growth” at the expense of long term growth/stability for the purposes of increasing his chances of winning re-election.

      Is this what’s happening? Is the entire system set up to produce only “good news” or “not such bad news, considering” up until November? After that, should Trump win, will this give the government license to curtail freedoms and change policy to enshrine Republican leadership as permanent? With the flip side being a Democratic win leaving things in a mess that can then be blamed on them?

      If so, I wouldn’t bet against the market until November, or just before that I suppose.

      • andy says:

        Not sure about November. But generally, in the bull market the bad news are ignored and the good news are extrapolated to infinity. The opposite is true in the bear market.
        We have euphoric bull market by all accounts. Nasdaq is about inbetween Jun 1999 and March 2000 in relevant terms, I think.
        Must go higher faster, or else.

      • Thomas Roberts says:


        Yes, that was Trrump’s plan. Basically, keep the economy superficially high, by means of excessive borrowing and tax cuts until he’s re-elected and then nobody knows. That was the original plan. Originally, there was speculation that if the imminent recession started before the presidential election, the Democrat would automatically win. If the recession didn’t happen before the election, the democrats would probably lose (maybe on purpose), maybe even with a Berrnie like candidate, that way the Republican party would take all the blame for everything negative associated with the economy, after the recession started.

        But now, the overall plan just seems to be for both parties just to get someone elected and prop up the economy as quickly as possible, again not concerned with the long term economy. Because, of all the excessive borrowing though, the US Dollar could lose alot of value and cause a worse recession at any point over the next few years or later on.

        Except during points where the economy is in freefall, the MSM always makes the economy out to be much better than it is. This is largely to satisfy advertisers and also to prop up stock market. Because, MSM news channels are owned by companies that own a range of channels, anything on a news channel that pi**es off advertisers, could result in a company pulling the ads from every channel that is owned by same company as that particular news channel.

  6. SocalJim says:

    Historically, the relationship between PMIs and equity market valuations is very good, especially when PMIs print above expected. This is good news for the stock market.

    • Wolf Richter says:

      They didn’t print above my expectation. I expected the Markit PMI above 50 as well because PMIs work that way. I thought May was the bottom, not June or July or whatever.

  7. Morty Mc Mort says:

    I remember and love this quote:

    Jean-Claude Juncker profile: ‘When it becomes serious, you have to lie’

    Now.. everyone is lying… all day long…

  8. Tom Stone says:

    Looking at the progress of Covid-19 a second shutdown before the end of July seems likely.
    Interesting times.

    • MiTurn says:

      I agree and add into the mix the dynamic of protests and the election, ‘interesting’ might be an understatement!

      • Lynn says:

        I think because of the protests and the election it’s possible a little more of the total *will* go towards main st and directly to workers, rather than the stock market.

        The thought of more Wendy’s and police stations going up in flames is probably a real fear factor.

      • Bobby Dents says:

        I don’t know about that. Protests are dying out.

        • Lynn says:

          If the homeless population goes up during this I think you can expect more.

    • Wisdom Seeker says:

      Maybe in a handful of troubled states, but not nationally.

      Daily death rate, nationwide, is dropping steadily despite rises in a couple of states. Nationally, COVID is back down to being at the level of a bad flu season, about 4x the typical average annual flu death rate and 2x the winter rate.

      California death rate has been steady for over 2 months. Locally the hot spots have moved around (Bay Area to SoCal), but in aggregate the surge in deaths is just not there.

      But if that changes, I’m with you.

      • Josap says:

        The age range of those catching the virus is lower. Here in Az more than 50% are under 45 yrs of age. They get sick enough to fill the hospitals but don’t die as often.

        Protesters, going to bars, dinners inside the restaurants, gyms opened. Parties, holidays, pools, rivers & lakes.

  9. Just Some Random Guy says:

    How’s everyone’s short position going today?

    • Wolf Richter says:

      Just Some Random Guy,

      Just fine. Today my SPY short that I placed June 19 in the morning (over two weeks ago) changed from green to red for the first time, and only by a little. So sorry to tell you, nothing has happened.

      But why didn’t you come around to ask this question when the market was down? You had plenty of opportunity to do it. You would have gotten a similar answer.

      • Phoenix_Ikki says:

        Wolf, really wish you have an ignore button in the comments section. Oh well, at least it’s good to know you’re attracting more visitors on your site, even though it’s probably drawing some of them from the same yahoo posters cesspool.

        • Just Some Random Guy says:

          Phoenix is scared of an opinion outside of his bear bubble.

      • Just Some Random Guy says:

        Didn’t you short Tesla?

        • Wolf Richter says:

          Ha, no!!! I’ve been on record for a long time telling people not to short Tesla because a stock that is so thoroughly beyond any logic has in theory and by definition no logical limits. Logic does not apply. Shorting stocks like that would be based just on luck. So that’s not my thing.

        • Just Some Random Guy says:

          Ahh OK. My mistake then. With all the WTF chart posts I thought you had.

        • Thomas Roberts says:

          Just Some Random Guy,

          Wolf claims to be shorting the market. But, I think we all really know, he just went FULL TESLA. Probably near 100% of his investments and savings all in Tesla (everything else is in B&M). He tries to hide it, but, I think we all know the truth. He might have just let it slip a little.

        • Wolf Richter says:

          Thomas Roberts,

          I assume that’s a joke. But in case it wasn’t, I don’t have time to dig up the comments I made about NOT shorting Tesla, but here is one that got a lot of attention. Said on Dec 30, 2019:

          “So Tesla at the current price is one of the most obvious shorts in history. But I wouldn’t short the shares because they’re just too crazy, and because the short is too obvious.”

          And a lot more about it in this article:


      • Stuart says:

        How are the airlines doing ? Casual observation would show a slow motion catastrophe. How will the current situation impact Boeing and Airbus ?

        • Wolf Richter says:

          Airlines are in a terrible place. But many are getting government bailouts and/or new capital from investors, and that increases their chance of making it without filing for bankruptcy.

          Both Airbus and Boeing had large backlogs going into this. But now the cancellations are hailing down on them, and their backlogs are shrinking. Both are also big defense contractors, and that’s a fairly stable business.

    • Bobby Dents says:

      Not much of a buy today. Weak rally. I can see debt contraction restarting in June, which means a pullback in purchases. My guess by mid-july, the next panic wave begins, but that was expected 2 months ago.

  10. Seneca's cliff says:

    Portland has been open for about 3 weeks now and the only things that seem to be doing well in the service industry are the Pot Shops. There has been effort put in to getting the restaurants outdoor seating in streets and parking lots but that just makes it more obvious that break-even level crowds have not materialized. But there are big queues of peopled lined up outside the Pot Shops at any hour of day. It kind of worries me that after 6 months of people spending their stimulus money on pot and consuming it all day long we may not have a worthwhile workforce left after this is over.

    • Zantetsu says:

      I’d wager a bet that all of the people you could possibly see lined up outside of pot shops is much, much less than 1% of the total work force in Portland.

      Which makes your post pure hyperbole. Also it reveals something about your prejudices given that you choose that particular hyperbole.

    • Xabier says:

      As Aldous Huxley observed, a drugged population is the ideal in a totalitarian system…….

      Contemptible people: should learn to drink good wine, sociably, like civilised human beings.

      • VintageVNvet says:

        EXACTLY what I thought in Jan, when first reading about this virus on the SCMP ( for P, South China Morning Post, one of my ”round the world” news daily reads BTW)
        So, making my first miss steak of this current virusy event and the subsequent use of it as an excuse to screw WE the PEEDONs even more than usual, I went and bought a case of my fave wine…
        And then, as soon as they announced the ”stimulus” tax refund, I went and bought a couple more cases, doing my part to help…
        How some ever, X,,, I do remember well the days of yore in my life when I could not even really afford the cheep est kind of beer, but could and did ”grow” some pot for free, or helped my neighbor dividing a $100 ”key” into 32 $10 oz… and I also remember well the saying in those days,
        “pot will get you over times with no money better than money will get you over times with not pot”’ or some such ”positive” thinking
        And, to be sure, I have heard from some good friends in CA and OR, where pot is legal, that they enjoy their good wines even more these days, not that i would know anything about that,,,

  11. If we can trust the Robintrack data, the Robinhooders are still hanging in there, maintaining or increasing their positions in popular stocks such as AAL (American Airlines), even when the price hasn’t done well. I have a feeling that this will continue as long as unemployment benefits remain as generous as they are. Isn’t Congress busy figuring out how to extend the stimulus for as long as possible?

    • Bobby Dents says:

      The 1200 check was way bigger. Spending has redropped since June 20th.

    • Brant Lee says:

      Congress is on recess. They report for two weeks at the end of July to cram in another stimulus then back on recess. Those two weeks should flavor the mood for elections so it should be a doozy of a name-calling, lying, backstabbing, self-promoting, etc. affair.

  12. ewmayer says:

    In other news, I recall a reader late last week asked the now-perennial question: “so, it there a good reason not to short TSLA at this point?” IIRC Wolf replied to effect of “Yes: TSLA at $2000”. At this rate of exponentially-increasing nuttiness we’ll be there by Friday, if not before.

    I mean, is this actual large buy volumes with real $ driving this crazy train, or a bunch of algos-gone-wild just trading some small number of shares back and forth thousands of time per day, each time adding a small amount to the price, what? I thought I’d some some wacky sh*t during the GFC – like GM common stock rising the day after it announced bankruptcy – but this beats all.

    And another hope-driven rally in the Ponzi markets, at the same time 39 of the 50 states reporting jumps in covid-19 daily-case numbers, and the country clearly headed for an “this virus is totally out of control thanks to the US being exceptional in all the wrong ways” disaster. Years from now, I wonder what historians will write about this time, should there be any people left to write about it.

    • Phoenix_Ikki says:

      A thought exercise but if a Ponzi scheme never go bust, will it still be considered a Ponzi scheme or a paradigm of the new normal? The way Tesla is going, I am not hopeful seeing it goes bust anytime soon and perhaps not in my lifetime. The fact that it can go up multiple billions in market cap in single day trading is nuts in itself, let alone a company that doesn’t generate real profit.

      It’s hard to see the light at the end of this insane tunnel especially if FED is support when things start to go south. Maybe Tesla has now gotten on board on the too big too fail train, especially when it comes to market cap..

      • sunny129 says:

        The stock bubble mania continues and those of us in retirement, cannot afford to chase this ‘mad race to the top’ sponsored by Fed & CO!

        When this bubble pops, Mr. Powell can all blame it on covid 19 and hide his ‘hideous’ actions, favoring the top 0.1% and probably next top 5%, at a cost to rest.

      • Wisdom Seeker says:

        There’s a word for “Ponzi scheme that never goes bust”: hyperinflation.

    • MCH says:

      You know what time it is, I’ll tell you what time it is. It is time for Elon to do a capital raise.

      Because he obviously screwed up in February raising at only $700/sh or something like that.

  13. sunny129 says:

    China Tells Its Population To Flood Into Stocks In Repeat Of 2015 Bubble

    “..on Monday state officials doubled down and a front-page editorial in the state-owned China’s Securities Journal said that fostering a “healthy” bull market after the pandemic is now more important to the economy than ever..’
    We can now add one more race in the great geopolitical rivalry between the US and China – whose stock bubble is biggest

  14. sunny129 says:

    The stock bubble mania continues and those of us in retirement, cannot afford to chase this ‘mad race to the top’ sponsored by Fed & CO!

    When this bubble pops, Mr. Powell can all blame it on covid 19 and hide his ‘hideous’ actions, favoring the top 0.1% and probably next top 5%, at a cost to rest.

  15. sunny129 says:

    The END GAME !?

    “The debt at the end of 2019 for the world was three times GDP. For every $3 borrowed, only $1 of economic activity occurred. That’s what we started 2020 with. Throw a pandemic into that .
    How does this end? It ends with us, the foundation, which is the main street economy, by both that snowball of debt and the avalanche of the mountain. That’s going to be a multi-decade problem.” . . and you have a long drawn out financial and economic crisis[..]

    There is going to be this endless supply of artificial stimulation into the markets. . . . Former New York Fed President Bill Dudley said the Fed’s balance sheet is going to $10 trillion. That’s what I have been saying, and now he finally said it. That’s not going away anytime soon. That’s not being unwound anytime soon. That becomes permanent lift to financial assets. . . . In the wake of that, less real capital gets used for infrastructure, research and development, growth and retooling the economy and getting jobs into this new period.

    Gold prices are going to “follow the expansion of the Fed’s balance sheet.”

    “We are continuing to drive up asset bubbles where we don’t have the real economy to back it up…”
    h/t NOMI PRINS

  16. timbers says:

    The internets say 600,000+ Investment “Advisors” got bailouts with our money. Why on Earth do we need advisors when the Fed has decided the market is only allowed to go up? Zombie company, zombie workers, zombie nation.

    • MonkeyBusiness says:

      Barry Ritholz, author of Bailout Nation, criticized the government for bailing out banks, etc. But then his firm took out a bailout too. Supposedly he’s returned the money and replaced it with a bank line. But in the first place he should not have taken the money.

      The whole 600000+ Advisors is a symptom of one disease that’s been afflicting this country i.e. the FIRE (Finance, Insurance and Real Estate) sector is too big.

      Our farmers suffer, while these monkeys party like there’s no tomorrow.

      Revolution is inevitable in this country.

      • Zantetsu says:

        I’ll have to disagree about “in the first place he should not have taken the money”. I think it’s reasonable to argue against bad laws and to work to overturn them or prevent them from passing, but once they are passed against your own personal wishes, you have no choice but to take the same advantage of them as everyone else. Why should you be disadvantaged just because the majority did not agree with you?

        The time to be righteous is when you can move the dial by getting everyone to agree to make things better. But if you can’t beat them, then join them.

        For example, I think income taxes should be higher. But that doesn’t mean that I’m going to voluntarily send more money to the government to pay what I think my income tax rate should be. Doing so would have a miniscule effect on the national treasury while significantly disadvantaging myself. When we all agree to do the right thing, I’ll be right there doing it myself though.

        So that guy who argued against the bailouts? Absolutely he should take them if the government has decided he should have them, even if he doesn’t think anyone should be getting them. But at the same time he should be advocating for them to be cancelled for everyone, including himself, and should gladly give them back along with everyone else if he is successful in getting the government to change the policy.

        • Just Some Random Guy says:


          Well said.

          Another version of this is when people say it’s hypocritical for retirees to vote for fiscal conservatives while cashing SS checks or using Medicare. Total BS. The govt forces everyone to participate in these programs. Nobody has a choice. You’re damn right after being forced – with the threat of prison for non-compliance – into paying for SS/Medicare for 40 years, people will take the benefits. That doesn’t mean those same people can’t advocate for getting less govt spending, including SS/Medicare reform.

          Shorter version: don’t hate the player, hate the game.

        • MonkeyBusiness says:

          Virtue when convenient is not virtue. When you say one thing and do the opposite, I think the dictionary has a word for it i.e. hypocrite. I have no problem whatsoever if he is one, but he presumably sold his book and investment philosophy to people based partly on his so called virtue. At the very least, the book buyers deserve a refund.

          But no, you are one of those “don’t blame the player, blame the game”, although players MAKE the game.

        • Root Farmer says:


          I’ll have to remember to apply that sanctimony as I explain to my employees why competitors have survived we chose “principle” and tossed them to the curb.

          Must be nice to have all you need.

        • Zantetsu says:

          One question, MonkeyBusiness:

          Is he saying, “The government should not bail out companies”, or is he saying “If the government offers to bail out companies, all companies offered such a bailout should refuse”.

          I suspect he’s saying the first, and not saying the second (which quite frankly, is so impracticable and naive as to be a ridiculous thing to even say), therefore, he is not being a hypocrite.

          The issues are a lot more complicated than the simple black and white you are seeing. You need to think deeper.

  17. cb says:

    Seconded. Acronyms should rarely be used, and then only after being spelled out at least once. Hopefully commenters will completely stop using acronyms. Poor form.

    • VintageVNvet says:

      Disagree old bean,,, IMHO, acronyms should be used as often as possible, BUT, I totally agree that in each and every ”proper” use, they should and ought to be preceded by being fully spelled out.
      That very many are not done so is a reflection of the failure of the current education system, without doubt.
      At a time when even some folks with ”Masters” and ”Doc” degrees are, in fact, functional illiterates beyond any hope else where than their particular and very specific field of study, we can only hope that some how and some time we will regain the level of general and every day abilities and knowledge that enable our world and our nation to grow and prosper and help all people of our world…
      NOT looking very good at the moment, eh

  18. Bruce says:

    This pretty much explains what is going on….there is NO alternative in bonds, no one is going to tie up money for 5-10 years at these interest rates. Gold may have some attraction at these rates if certain things happen, but stocks have certainly outperformed gold. I hear lots of carping about the rising stock market, but very low interest rates-ZIRP- have to be considered. Not requiring an Einstein for this conclusion….

    • Wolf Richter says:


      I removed the link. Summarize what the article says instead of just linking it. I’m not in the business of promoting Bloomberg for free.

  19. Just Some Random Guy says:

    The $2500/mo federal govt UE gravy train is pulling into its final station at the end of the month. Everyone making more NOT working than working will have to go back to work after a nice 3 months vacation. July and August jobs numbers will be in the millions again as this unwinds itself.

    • MonkeyBusiness says:

      Don’t forget, they’ll have lower income. Spending will drop. You can’t have it both ways.

      Also supposedly there will be an eviction tsunami. Not sure what the impact of that will be. If you are required to pay back back rent in order not to get evicted, that’s another drag on spending.

    • Paulo says:

      Rightttttt. Vacation = avoiding a pandemic. Those that did go back to work last month are now living in freaking out red states; places that most likely will have scores of refrigerated trucks holding bodies in 2-3 weeks.

      You can’t have a working economy until the virus is contained or accommodated with behaviours that work and allow people to work, safely. This is still the first wave with 50K cases per day, and infection numbers accelerating. Give it 2-3 weeks for the death rate to catch up.

      History will not be kind to the USA for needlessly allowing this to happen. Of course, booze parties with a cash pool for the first Covid infection for the lucky attendee doesn’t really indicate much beyond ignorance. Kind of like a political rally.

      $2500 a month to keep a family fed, housed, and alive (or not rioting) is pretty cheap insurance for the status quo to keep their heads on tight.

      • Petunia says:

        I’m in one of those red states. What is scaring me now is not the plandemic, it’s the crime. Lots of desperation out there.

        • Xabier says:

          How awful, Petunia: do you mean assaults and house raids?

          It has always seemed to me that the logical consequence of COVID must be a sharp nd long-term increase in crime.

          Here in the UK now that lock-down has ended the immigrant drug gangs are busy shooting one another once more. BAU for them.

      • Zantetsu says:

        Paulo, I have been visiting family in Ohio for the past two weeks and just spent a few days camping in Kentucky, a very red state. People around here are mostly ignoring Coronavirus, I’d say 10% – 20% of people wear a mask in public places, and large gatherings are not shied away from. There is some token effort towards distancing. In general I’d say most people do not believe that the Coronavirus is that serious.

        Are they wrong? It’s hard to say. The infection rates have risen, but I think it’s pretty obvious that the testing rates have risen too. The average age of the infected is decreasing, and the effects are usually milder and overall less drastic in these younger populations. From what I have read the overall death rate has not increased despite the infection rate increasing.

        Will it remain this way? Or will the death rates accelerate in a few weeks like you say as a delayed effect of the increased infection rates?

        I don’t know, and I don’t think you know either. No one really knows, and I think it’s actually possible for reasonable people to disagree on this. I can see that most people around here already made their mind up and think that damage to the “economic health” of the area due to strict public health rules is a bigger problem than the “physical health” danger of the virus itself.

        It is entirely possible that you are right and that in a few weeks, things will be on such an obviously bad path that it will be clear that the decision to end lockdown early was the wrong choice.

        But I also think it’s entirely possible that you are wrong and that the disease will remain managed to a degree and death rates will not rise (even though infections may rise).

        I guess only time will tell …

        I do wonder how things are going back in the Bay Area. I was very, very observant of lockdown rules there, I hardly say anyone in three months. But here in Ohio it’s almost like “normal”. Just have to make it through two more family reunions without getting Covid-19 and I’ll be “home free” back to Sunnyvale.

        • Just Some Random Guy says:

          “The average age of the infected is decreasing, and the effects are usually milder and overall less drastic in these younger populations. From what I have read the overall death rate has not increased despite the infection rate increasing.”

          Not only have death rates not increased, they have DECREASED steadily for the past 10 weeks. I’d post a link but I know Wolf doesn’t like giving free clicks. But Google it and you can see for yourself.

        • Wolf Richter says:

          You guys need to give it 2-3 weeks before making that judgement. Deaths lag “cases” quite a bit. People don’t get infected and die that moment. True, now younger people are starting to fill up the ICUs, and true, treatments are getting better as knowledge increases, and true, the younger people are better able to survive the treatment (three weeks of intubation, etc.).

          But they’re still very sick, and it will take them months to recover from the ICU, and it looks like there is a chance they will end up with permanent organ damage and other chronic issues. And while they’re in the hospital, there is a chance they infect others, including doctors and nurses, and quite of few of them have already died trying to help their patients. All of this is a huge cost to society. 132,000 people in the US have already died of Covid in just four months, and you can do the math of what that might do over a couple of years. So I don’t know what’s there to take lightly.

        • Josap says:

          It’s hard to tell what will happen in the short term future to virus rates by location.

          Az has a very high rate of infection now. Our hospitals are full and some businesses have been closed again.

          The death rate may stay lower as the age range of those infected is lower. Although their bodies might suffer long term damage.

      • Just Some Random Guy says:

        “Those that did go back to work last month are now living in freaking out red states; places that most likely will have scores of refrigerated trucks holding bodies in 2-3 weeks.”

        LOL. Is that what CNN keeps telling you? Get out of your bubble and go visit an actual red state. In my county of just under 200K people, we’ve had less than 10 Corona deaths. And this is with nobody wearing masks and everything open. You literally have no idea what you’re talking about

  20. esp says:

    Can anyone (Wolf?) explain who’s responsible for the relentless after-hours levitation that pegs the indices for the next session while raising EURUSD?

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