It’s a very muddled picture. The deflationary trends pointing to the economy slowing down but the construction and manufacturing (PMI) indices showing expansion.
Manufacturing employment growth has been uneven. We are seeing a return to manufacturing job growth since the start of the year, which we had not seen for quite some time.
If there is sustained expansion in those sectors, we will see sustained job growth, which is something neither sector has seen for quite some time.
However, a lot of the construction increase appears to be powered by AI data center projects, and Bloomberg is forecasting that a majority of AI data center projects' power demand expectations are likely to go unmet. It is far from clear where the power grid expansions are going to come to support data center expansion and growth.
I’m going to make a guess here. Trump has gotten the word out to the oil industry - and thus to Wall Street - of, “Wait. I’ve got a plan. It’s goin to be great. Trust me!” This would explain why the oil futures and financial markets are not becoming alarmed at an impending oilpocalyse. Trump is following a plan that will hold off energy-price surges and inflation until at least after the midterms. His team is not stupid, and Trump is a master of playing the cards correctly.
I’ll also bet that you will be among the first to see Tump’s strategy, Peter. Looking forward to your analysis,
I hope you're right, and I hope President Trump's Persian Gulf strategy works out well.
I've never been much on "trust the plan." Among the hoariest planning aphorisms in existence is the realization that no battle plan ever survives first contact with the enemy. Operational planning is necessarily a discipline which combines conceptual elegance with practical panic.
From Winston Churchill’s “My Early Life: A Roving Commission” (1930), which I’m reading right now:
“Let us learn our lessons. Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The Statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. Antiquated War Offices, weak, incompetent or arrogant Commanders, untrustworthy allies, hostile neutrals, malignant Fortune, ugly surprises, awful miscalculations - all take their seats at the Council Board on the morrow of a declaration of war. Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance.”
It’s a very muddled picture. The deflationary trends pointing to the economy slowing down but the construction and manufacturing (PMI) indices showing expansion.
Construction expansion is plausible, given the acceleration in Construction job growth in July.
https://fred.stlouisfed.org/graph/?graph_id=1581915&rn=284
Manufacturing employment growth has been uneven. We are seeing a return to manufacturing job growth since the start of the year, which we had not seen for quite some time.
https://fred.stlouisfed.org/graph/?graph_id=1581914&rn=893
If there is sustained expansion in those sectors, we will see sustained job growth, which is something neither sector has seen for quite some time.
However, a lot of the construction increase appears to be powered by AI data center projects, and Bloomberg is forecasting that a majority of AI data center projects' power demand expectations are likely to go unmet. It is far from clear where the power grid expansions are going to come to support data center expansion and growth.
https://archive.ph/DMfz3
Muddled indeed.
Deflationary Slowdown? 🧐🧮📝📉🤔🏦
Rising rates....?
We definitely need more refinery capacity🛢️🏭⛽🚙🛻🚜👨🏽🌾 and Nuclear-powered ⚛️⚡⚙️ Electricity generation.
The more electricity we can reliably generate through means other than fossil fuels, the better.
I’m going to make a guess here. Trump has gotten the word out to the oil industry - and thus to Wall Street - of, “Wait. I’ve got a plan. It’s goin to be great. Trust me!” This would explain why the oil futures and financial markets are not becoming alarmed at an impending oilpocalyse. Trump is following a plan that will hold off energy-price surges and inflation until at least after the midterms. His team is not stupid, and Trump is a master of playing the cards correctly.
I’ll also bet that you will be among the first to see Tump’s strategy, Peter. Looking forward to your analysis,
I hope you're right, and I hope President Trump's Persian Gulf strategy works out well.
I've never been much on "trust the plan." Among the hoariest planning aphorisms in existence is the realization that no battle plan ever survives first contact with the enemy. Operational planning is necessarily a discipline which combines conceptual elegance with practical panic.
From Winston Churchill’s “My Early Life: A Roving Commission” (1930), which I’m reading right now:
“Let us learn our lessons. Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The Statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy but the slave of unforeseeable and uncontrollable events. Antiquated War Offices, weak, incompetent or arrogant Commanders, untrustworthy allies, hostile neutrals, malignant Fortune, ugly surprises, awful miscalculations - all take their seats at the Council Board on the morrow of a declaration of war. Always remember, however sure you are that you can easily win, that there would not be a war if the other man did not think he also had a chance.”