U.S. economy July employment release data, plus weekly data through July 29 and Google/Big Data (follow up first part, the second part, the third part, the fourth part, the fifth part, the sixth partand “so you think we might be in a recession by mid-June”, first part and the second part) – right Opinion expressed by a reader (today!) “Based on the metrics I track, yes, I think we’re in a prolonged recession and I’m expecting a hard reset in the second half of the year.”
Here’s the series of pictures the NBER’s Business Cycle Data Council follows along with quarterly GDP and IHS Markit GDP.
figure 1: Nonfarm payrolls (dark blue), Bloomberg consensus as of Aug. 1 (blue+), civilian employment (orange), industrial production (red), 2012 excluding transferred personal income (green), manufacturing and trade sales in 2012 dollars (black), consumption in 2012 dollars (light blue), monthly GDP in 2012 dollars (pink), official GDP (blue bars), all log normalized to 2021M11=0 . Sources: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published August 1, 2022), NBER, and author’s calculations.
As shown above, NFP increased by 528,000, far exceeding the Bloomberg consensus of 250,000. In addition, the clerical employment series based on the family series also increased, 179K.
There are often concerns about the impact of the BLS birth/death model on firms, a key input to the sample adjustment process around turning points. The civilian employment sequence adjusted to conform to the nonfarm wage concept is less susceptible to this issue; it also moved up 611K.
figure 2: Nonfarm employment (blue), civilian employment over 16 (tan), and civilian employment adjusted for NFP concepts (turquoise), all in the 000s, sa Source: U.S. Bureau of Labor Statistics (published July) and BLS.
In fact, the unemployment rate fall From 3.6% to 3.5%.
Unemployment is not a central factor in the BCDC’s deliberations, nor does it predict a recession when the Sahm rule is used.
image 3: Unemployment rate U6 (black), Bloomberg consensus 8/4 (black+), hypothetical unemployment rate required to trigger Sahm rule (red squares). Source: BLS via FRED, Bloomberg, author’s calculations.
The data are related to the labor market survey conducted in mid-July. For the entire month of July, we can look at weekly data. The Lewis-Mertens-Stock weekly economic index remains above trend:
resource: New York Fed through FREDaccessed August 4, 2022.
