I wish I was like you/easily amused

The ISM Manufacturing PMI report shows increased manufacturing activity. In step with the hot PPI we see that prices are increasing. Customers have drained their inventories (which is in line with delaying purchases until there is more clarity or a reprieve on tariffs). That may be pulling up production to fill the backlog. It will be interesting to see what happens if the tariffs are gutted by the Supreme Court and the administration is required to pay back any collected tariffs.

I view this as mixed, but positive. There is definitely price pressure, but customer inventories are so low that this should pull up actual manufacturing at those higher prices. Employment is still contracting, which implies higher productivity (either through automation or overtime). Not sure if an unwillingness to hire indicates people want to see more of a trend. But, if costs are going up, and low inventories are driving forward production, this means that we should see inflationary effects. At some point customers should start passing on costs through higher CPI prices.

Well, maybe higher CPI prices. It depends on whether or not the consumer is able to tolerate those higher prices in the coming months. Two scenarios could play out, given half of all spending is now done by just 10% of the population. A declining equities market reduces spending as the top 10% see their wealth declining. In which case the prices may not show up in the CPI, they will drive down margins for retailers. The second scenario is the wealth effect is not strong/the equity market holds, and people just eat the inflation. That will push off rate cuts even further.