Nothing impressing me here, as per the chart:

Highlights

Durable goods orders came in as billed with a steep aircraft-related decline for the headline, at minus 6.8 percent, contrasting with solid gains for ex-transportation at 0.5 percent and core capital goods (nondefense ex-aircraft) at 0.4 percent. A special plus in the report, and one that will lift GDP, is a sharp pickup in shipments of core capital goods, up 1.0 percent in July with June revised 2 tenths higher to 0.6 percent.

Total shipments rose 0.4 percent with inventories keeping a balanced pace, up 0.3 percent. A negative in the report is a 0.3 percent decline in unfilled orders that follows, however, June’s 1.3 percent surge.

For aircraft, which has picked up this year, orders fell 82 percent in July vs June’s enormous 227 percent jump. Orders for defense aircraft, up nearly 50 percent, are a positive in July’s data as is electrical equipment, up 2.6 percent in a good sign for construction. Computers and fabricated metals also show gains. Negatives include a 1.2 percent order decline for vehicles that follows a 0.7 percent decline in June and a 1.4 percent decline for machinery orders that belies the month’s strength for core capital goods.

But positives are definitely the theme of today’s report, one that helps offset last week’s unexpected decline in manufacturing production and supports the enormous strength being signaled by advance regional reports. The economy may very well get a solid second-half boost from what has been an improving factory sector.

Nothing good here either:

From WardsAuto: Forecast: U.S. Auto Market Continues Downward Trend in August

A WardsAuto forecast calls for U.S. automakers to deliver 1.51 million light vehicles in August. … The report puts the seasonally adjusted annual rate of sales for August at 16.5 million units, below the 17.1 million SAAR in same-month 2016 and 16.7 million in prior-month 2017.
…
Light-vehicle inventory stood at 3.86 million units at the end of July, up 9.4% from year-ago and about 15% higher than necessary with current sales rates. The streak of record-high stock is expected to continue with 3.8 million units at the end of August, 7.5% greater than same-month 2016. This will leave automakers with a 69 days’ supply, same as prior-month, but well above year-ago’s 62. Slowdowns in production and higher sales incentives through September are expected to narrow the gap between supply and demand.

Read more at http://www.calculatedriskblog.com/#oMiQuZGzVghgXYBq.99

With each data release it seems more likely to me that the deceleration in the growth of borrowing from the banks is reflecting a drop in aggregate demand:

Growth of C and I loans has been near 0 since the election:

Loans create deposits, so here it is from a segment of the deposit side. M2 includes M1 which is directly affected by the size of the Fed’s portfolio and QE, however those variables have been largely unchanged for the time period of this chart:

Seems to me the highlighted proposals will reduce spending more than the cut in tax rates will increase spending:

Trump’s team and lawmakers making strides on tax reform plan

Aug 22 (Politico) — President Trump’s top aides and congressional leaders have made significant strides in shaping a tax overhaul. There is broad consensus on some of the best ways to pay for cutting both the individual and corporate tax rates. The options include capping the mortgage interest deduction for homeowners; scrapping people’s ability to deduct state and local taxes; and eliminating businesses’ ability to deduct interest, while also phasing in so-called full expensing for small businesses that allows them to immediately deduct investments like new equipment or facilities. One idea would be taxing the money that workers place into their 401(k) savings plans up front.

Weak, inline with permits and decelerating mortgage credit growth:

Highlights

Overstating weakness, July’s headline for new home sales fell to a far lower-than-expected annualized rate of 571,000. This is offset, however, by upward revisions totaling 33,000 in the two prior months which now stand at 630,000 and 618,000. This series, where sample sizes are low, is often volatile month-to-month with the 3-month average, still over 600,000 and just off expansion highs, telling the more reliable story.

The best news in July’s report is an increase in supply, up 4,000 to 276,000 new homes on the market. Relative to sales, supply moves from 5.2 months to 5.8 months which is nearly at the 6 month mark which is widely considered to be balanced for new homes.

Prices are showing increasing traction, up 0.7 percent in the month to a median $313,700. This is up 6.3 percent year-on-year which is roughly in line with prices of existing homes.

The strength in pricing is good news for residential investment but not for first-time buyers who are being priced out of the new home market. The downdraft in July’s data aside, new homes are probably still a positive for the housing sector which has been trending higher in fits and starts all year. Watch tomorrow for existing home sales where strength is the expectation.

Today’s survey information:

Highlights

Weakness in manufacturing, at 52.5, is being offset this month by strength in services, at a very strong score of 56.9. The two make for a PMI composite of 56.0. New orders for the services sample are at a 2-year high with hiring also very strong. Input costs for service providers are up as are, in especially positive news, selling prices which are at a nearly 3-year high.

Selling prices for manufacturers are also higher this month with input costs also up. Order growth, however, is slowing as is production. Inventory build is also slowing.

These results are mixed with the slowdown in manufacturing a concern especially following last week’s surprise dip in manufacturing production.

Down a bit, low and going nowhere:

Worse than expected, but modest growth from depressed levels.

Highlights

The Federal Reserve inadvertently released what is a weak July industrial production report about a 1/2 hour early this morning. Headline production rose 0.2 percent vs expectations for 0.3 percent with manufacturing output showing outright contraction, at minus 0.1 percent vs Econoday’s consensus for a 0.2 percent gain. Capacity utilization hit expectations at 76.7 percent.

A 3rd straight decline in motor vehicles, down 3.6 percent in July, held down the month’s production. Excluding vehicles, manufacturing rose 0.2 percent. But also not helping were business equipment, down 0.5 percent in the month, and construction supplies, down 0.4 percent. On the plus side with small gains are consumer goods, materials, and non-industrial supplies.

Outside of manufacturing, mining posted a 4th straight solid gain, at 0.4 percent, with utilities swinging higher with a 1.6 percent July increase.

This report, which is the first definitive look at July’s factory sector, is unexpectedly flat and puts an end to the run of recently strong economic data. Strength in sentiment surveys like this morning’s Philly Fed do not always match the real world. Vehicle sales were up in July but it has been a tough year for the sector. And given the decline in this report’s manufacturing component, the upward momentum that the factory sector was showing looks less certain now.

As previously discussed, it’s only going to get worse:

Blackstone co-founder Steve Schwarzman and other CEOs on the now-defunct White House policy forum were perplexed by President Donald Trump’s efforts to take responsibility for disbanding the group, sources told The New York Times.

Schwarzman, who chaired the group, thought he had an agreement with the White House to announce that the idea of ending the Strategic and Policy Forum was a joint decision, the Times reported.

The CEOs decided during a Wednesday morning conference call to dissolve the forum in the uproar that followed Trump’s news conference in which he made comments that were deemed supportive of white supremacists.

Trumped up expectations taking a hit:

Lower than expected, and, as always starts are ultimately determined by permits, which have been slowing as per the chart, which also reflects the deceleration in mortgage lending over the last 6 months:

Highlights

Housing starts couldn’t hold the 1.200 million annualized line in July, falling to a lower-than-expected 1.155 million. The rate is now back to the weakness of March and April in what may be emerging as a declining trend this year. Permits also fell but are holding over 1.200 million, at 1.223 million which is down from June’s 1.275 million but with this trend holding up better.

The swing factor is multi-family units, the smallest of the report’s two components but, after a run of heavy building earlier this year, are now in retreat. Multi-family starts fell to a 299,000 rate in July from June’s 353,000 and are down 34 percent year-on-year. Multi-family permits, at 412,000, are down nearly 10 percent.

Single-family data are holding steady with starts at 856,000 for an 11 percent yearly gain and permits at 811,000 and a 13 percent gain.

Putting all the pieces together: starts are down 5.6 year-on-year in weakness offset by permits which are up 4.1 percent. Permits are the forward looking indication in this report and today’s news, despite July weakness and general volatility in the data, is good. The housing sector, even with starts being soft, looks to be a contributor to the second-half economy.

Psychologists surveyed hundreds of alt-right supporters. The results are unsettling.

Aug 16 (CNBC) — Kteily, the co-author on this paper, pioneered this new and disturbing way to measure dehumanization — the tendency to see others as being less than human. He simply shows study participants the following (scientifically inaccurate) image of a human ancestor slowly learning how to stand on two legs and become fully human.

Participants are asked to rate where certain groups fall on this scale from 0 to 100. Zero is not human at all; 100 is fully human.

On average, alt-righters saw other groups as hunched-over proto-humans.

On average, they rated Muslims at a 55.4 (again, out of 100), Democrats at 60.4, black people at 64.7, Mexicans at 67.7, journalists at 58.6, Jews at 73, and feminists at 57. These groups appear as subhumans to those taking the survey. And what about white people? They were scored at a noble 91.8.

The comparison group, on the other hand, scored all these groups in the 80s or 90s on average. (In science terms, the alt-righters were nearly a full standard deviation more extreme in their responses than the comparison group.)