ISM Services Contract Sharply

Again, don't take too much out of any 1 number, but the trend is so very clear. Keep in mind what the US is now - a service economy. But hey, Fed cuts solve everything. We "should be out of all of these issues in 6 months" (blah)

And let the drumbeat for "surprise" intrameeting Fed cut in about 3 weeks begin now.... we are heading for 2% rates people.

• 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.
• The worst housing slump in a quarter-century is spreading throughout the economy, hurting businesses such as builders, retailers, wholesalers and mortgage lenders. The report adds to concern Americans are spending less as job losses mount, raising the risk the economy may tip into a recession, economists said.
• The index was projected to fall to 53, the median forecast in a Bloomberg News survey of 65 economists. Estimates ranged from 51 to 55. The index has averaged 57.6 since its inception in July 1997. (put 100 economists in a room, and you still get the wrong answer, or 101 wrong answers)

But remember, DON'T WORRY! Housing, banks, and retailer stocks are flying because the Fed solves everything with cuts! KOOL AID all around.