Macro Update: "Transitory" Losing Traction -- And -- Recession Risk is Not An Issue Right Here...

Quick update this week.

Our macro index moved down a titch with just one input (durable goods orders ex-transportation) changing score (positive to neutral).

PWA Index:

Durable goods orders ex-transportation:

Other data worth referencing:

• The Personal Consumption Expenditures (PCE) Price Index is the Fed's chosen inflation metric. Suffice to say that their "it's only transitory" inflation narrative is losing traction:

That said, surely, as bottlenecks ease there'll be some relief. Question being, beyond the bottlenecks will higher/rising inflation be structural in nature? Our view is yes...

Meanwhile, here's from this morning's release of the September ISM Manufacturing Index: 

COMMODITIES REPORTED UP/DOWN IN PRICE AND IN SHORT SUPPLY

Commodities Up in Price

Adhesives (3); Aluminum (16); Aluminum Extrusions (2); Aluminum Products (6); Caustic Soda (4); Copper; Corrugate (12); Corrugated Packaging (11); Diesel Fuel (9); Electrical Components (10); Electrical Motors (3); Electronic Components (10); Foam; Freight (11); High-Density Polyethylene (HDPE) (9); Labor — Temporary (5); Logistics Services; Maintenance, Repair, and Operations (MRO) Supplies; Natural Gas (3); Ocean Freight (10); Packaging Supplies (10); Pallets (3); Paper; Plastic Containers; Plastic Resins (13); Polyethylene (8); Polypropylene (15); Resins; Resin-Based Products (8); Rubber-Based Products (2); Semiconductors (8); Solvents; Steel (14); Steel — Carbon (10); Steel — Cold Rolled (2); Steel — Drums; Steel — Galvanized; Steel — Hot Rolled (13); Steel — Stainless (11); Steel Products (13); Surfactants; and Tires.

Commodities Down in Price

Lumber (3); Steel — Scrap; and Wood (2).

Commodities in Short Supply

Adhesives and Paints (3); Aluminum (6); Aluminum Products (5); Corrugated Packaging (3); Electrical Components (12); Electronic Components (10); Freight; Harnesses; Labor — Temporary (5); Nylon 6,6 Polymer; Ocean Freight (6); Plastic Containers; Plastic Products (8); Plastic Resins — Other (7); Plastic Totes; Polyvinyl Chloride (PVC) Plastics; Printed Circuit Board Assemblies (2); Resin-Based Products (2); Rubber-Based Products (2); Semiconductors (10); Steel (10); Steel — Hot Rolled (11); Steel — Stainless (7); and Steel Products (8).

Note: The number of consecutive months the commodity is listed is indicated after each item.

• Bloomberg Commodity Index (we like commodities long-term):

• US pending home sales for August rose 8.1% (month-on-month), hugely besting the 1.4% estimate.
• US jobless claims rose to 362k, which marks the second week in a row with a higher read (touched on that yesterday).
• Conference Board's Consumer Confidence Survey continues to signal waning sentiment:

• US ISM Manufacturing Index ticked up in September:

• Purchasing Manager Indices (PMI) for South Korea, India, Australia, China (services) and the Philippines were all above 50 (expansionary), and up versus August. Taiwan and Japan both scored above 50, but lower versus August. Vietnam came in at a contractionary 40.2, same as August. China's manufacturing PMI scored just below 50 (49.6).
• The Eurozone Manufacturing PMI came in at 58.6 versus 58.7 in August. 
• Eurozone Economic Confidence ticked higher in September:

There's more, but you get the gist: While it's anything but perfect out there, recession risk is not an issue at this juncture...

Have a great weekend!

Marty