A Few of Our Favorite Things

Cap goods spending makes a new high (we had to rescale the chart). Housing transactions make a new high. And best of all, the inventory/sales ratio makes a visible lift-off from near all-time lows. The boom is very much intact in the mid-frequency indicators. 

The historic output gap remains to be filled, with the business inventories-to-sales ratio falling to a new cycle low. Bad news for inflation being rapidly transitory, but great news for future growth.

Capital goods shipments fell, but that's not what we track. We are interested in the future, and the good news is that capital goods orders rose to new all-time highs. Oh, and the post-pandemic housing boom is alive and well, too.

The historic boom isn't just stimulus-driven consumption -- it's CAPEX, too. New orders for non-defense capital goods (ex-aircraft) eked out a new all-time high in July, on top of a what is already more than a year-long moonshot.