One of the components of inflation is the change in service prices of consumer goods and services. It fell sharply by 5.2 points to 53.4.

This is a leading indicator for the Personal Consumption Expenditures (PCE), a favorite inflation gauge of the Fed.

Employment increased slightly from 48 to 48.5. Employment has been contracting, as have backlogs. A backlog refers to a buildup of work that has not been completed in a timely manner.

The bottom line is that we are seeing mixed signals in the economy, with some pointing towards a recession and others not.

From my perspective, it feels like the anecdotal part of our brain is saying, ‘Hey, something’s up, I just can’t put my finger on it.’ This is good news for interest rates in the future and the kind of news the Fed wants to start seeing before they initiate rate adjustments.