Employment rose in health care, hotels and restaurants, retail, manufacturing, finance, and wholesale trade.
Overall, in the last couple of months, the annual inflation rate has dropped, which is heading in the right direction; it should be noted that the decline in the headline rate is essentially a function of declining energy prices.
The money Americans are spending is still high, but it reflects the higher prices they are paying because of inflation. Adjusted for inflation, retail spending has been flat for the past year.
Economic data reflecting the housing market conditions have been weak, as seen by the drop in permits signaling weakness in future projects.
Inventory continues to be the main impediment to increasing new-vehicle sales volumes above the rates seen in recent months. The higher prices, reduced incentives, and rising interest rates also push average monthly payments higher.
Manufacturers feel the brunt of rising interest rates and high inflation as customers scale back. And they are also confronting ongoing shortages of supplies and labor that have hindered production for the past year and a half.
This is the second month in a row the PMI was at its lowest since June of 2020, showing a continued slowing in the growth rate in manufacturing.
The logistics industry continues to expand, driven primarily by high inventory levels and associated costs.
The spread between the two capacity metrics is 22.0, the second-highest reading over the last four years. The only other time we saw a similar distance was April 2019, when the two metrics were 21.3 points apart.
The shipments component of the Cass Freight Index® rose 3.6% on a y/y basis in August. Ahead of the revised 1.9% y/y increase in July.
The expenditures component of the Cass Freight Index® rose 1.9% m/m in August after a 3.0% decline in July, with shipments up 6.6% and rates down 4.4%.
Preliminary Class 8 orders for August jumped. Most OEMs began placing a limited number of orders for the first quarter of 2023.
The bottom line is that the need for carriers to replenish their fleets is still much higher than the current production capacity under the current restrictions. Even as the economy has slowed, the need for replacements will continue to push demand which will not be able to be fulfilled entirely until supply chain shortages are resolved.