Dark Predictions Week in Review

Jobs, job openings, construction spending, & more

A central architect of our current tariff policy, writing in the New York Times, explained that “Despite dark predictions from the president’s harshest detractors, the assembly lines have not ground to a halt, the crops are not rotting in the fields and the Social Security checks continue to arrive on time.”

Is that the standard for economic performance? It’s like a Baltimore fan saying, “As long as the Orioles play their full schedule, we’re good.”

This shortened week gave us several critically important economic updates, including on construction spending, manufacturing, jobs, and a lot more.

Tuesday

Construction Spending

Construction spending fell yet again and is down about 3% over the past year. The private nonresidential segment—down another 0.5% in July and 3.7% over the past year—is particularly weak, with a problematic combination of elevated construction delivery costs, stubbornly high borrowing costs, and economic uncertainty conspiring to suppress construction starts. Aside from booming construction activity for data centers and churches (the new gods and the old), there’s not much to like in these data.

ISM Manufacturing PMI

Manufacturing activity contracted for a 6^th consecutive month, according to this survey of industry managers. The respondents had much to say about tariffs, none of it particularly upbeat (link to those comments)

Oil Stuff (Baker Hughes Rig Count, Gas & Diesel Prices)

Gas prices inched up again and are now more than $3.30/gallon for the first time since June, though still slightly cheaper than one year ago. Diesel prices inched up and are now up $0.11/gallon year over year.

The number of active U.S. oil rigs inched back up by 1 but is still about 70 rigs lower than one year ago. Not much movement here over the past few weeks as the price of oil remains in the sixties, and this week in the low-sixties.

TSA Checkpoint Travel Numbers

The number of people flying bounced back last week, according to TSA data, and is now above year-ago levels. It’s tricky to interpret travel data around holiday weekends, but there doesn’t appear to be anything to worry about here. Oh, Canada, if you were still coming here . . .

Wednesday

Job Opening & Labor Turnover Survey (JOLTS)