Durable goods orders, oil prices, Saudi OSP’s

Not adjusted for inflation but not showing signs of recession:

If oil prices remain near current levels the inflation is over and we’re back to pre-Covid low inflation and slow growth, with a government deficit of maybe 5-6% of GDP (including the new interest expense from the rate hikes which support the economy) supporting demand and a Congress that believes the deficit has to come down to contain inflationary pressures.

But I think it’s far more likely that oil prices spike much higher as Saudis have hiked prices again and are working with Russia to destabilize the west. And with higher oil prices it all falls apart again:

Saudi Arabia sets Aug crude prices to Asia at near-record high | Reuter

The official selling price (OSP) for August-loading Arab Light to Asia was raised by $2.80 a barrel from July to $9.30 a barrel over Oman/Dubai quotes, state oil producer Saudi Aramco (2222.SE) said on Monday, close to the record high premium of $9.35 per barrel hit in May.

Putin and MBS discuss oil less than week after Biden visit to Saudi Arabia (axios.com)

DFO optimism, homebuyer competition, Architecture index, mortgage purchase apps, builder confidence

This makes sense to me. We have had a post-Covid war slowdown in federal spending that is evidenced by the decelerating economy. But the federal deficit is still high enough to keep things muddling through at modest growth, helped some by the rate hikes which
are universally believed to slow things down when in fact the increased deficit spending for the additional federal interest expense adds a bit of (highly regressive) support for the economy:

It has fallen off with the slowdown but remains reasonably high historically:

Down from the highs but still showing growth:

After a large Covid dip followed by a post-Covid recovery sales are just below where they were for most of the pre-Covid years. And with prices a lot higher nominal sales are still much higher:

Mortgage purchases applications are also down to levels just below pre-Covid years:

Housing starts remain above pre covid levels, even with higher rates, and the chart gives a good indication of how much housing has declined in size relative to the rest of the economy since the 2006 peak:

Confidence is down but still above 50 indicating modest growth is expected:

Shipping, CPI

Worst of the shipping issues are behind us:

Wholesale price growth is moderating as well:

Core CPI growth also moderating:

Headline CPI continues to grow, and it is mainly driven by energy prices:

Recently, however, energy prices, which have been the primary driver of higher prices, have dropped substantially, so the next CPI report will show a substantial reduction:

ISM services, employment

The rate of growth has been decelerating due to the fiscal contraction, but remains over 50 which means positive growth:

No recession here as employment growth continues and unemployment isn’t rising. Yes, growth is slowing from the post-Covid fiscal collapse, but not yet to the point of negative growth. And the increase in prices that exceeds wage growth further works to cause people to take whatever jobs they can to make ends meet.