Permits and starts have fallen off but are still above pre-Covid levels. This particular sector is presumed to be the target of Fed rate hikes. I suspect it is a temporary setback with buyers taking a wait and see attitude, as employment continues to grow:
The post-Covid bounce continues with no sign of recession.
US energy costs are relatively low which is helping drive the export component:
Peter Coy’s NYT article today was about my assertion that rate hikes are adding to inflation, which was confirmed by his quote from Prof. Michael Woodford, who is considered the #1 mainstream monetary economist and the Fed’s ‘go to’ economist:
As previously discussed, with oil prices coming down the inflation problem ends.
(The month to month change in CPI was 0)
And what happens next depends on what oil prices do next.
I suspect they go a lot higher as Saudi OSPs remain elevated and speculative long positions taken on when the war in Ukraine started seem to have been sold in anticipation of recession. And while refining margins are down from the highs, they remain elevated, indicating refiners, the only buyers of crude oil, are continuing to run flat out.
This is about borrowing to spend, indicating positive spending and GDP:
Pressures easing here:
And this may indicate global spending is holding up:
So in short we had Covid deficit spending north of 15% of GDP supporting strong growth, followed by a collapse in deficit spending that resulted in a strong deceleration of growth. However sufficient deficit spending remains (about 5% of GDP) to sustain more modest levels of growth.