We’ll see if it’s the brutal month. Currently, monthly GDP continued to grow in February, albeit at a subdued rate (0.2% m/m), while January’s growth was revised upwards.
figure 1: Nonfarm payrolls, NFP (dark blue), Bloomberg 4/3 consensus (blue+), private employment (orange), industrial production (red), personal income excluding 2012 China transfers (green), manufacturing and Trade Sales Ch.2012 USD (black), Ch.2012 USD Consumption (light blue) and Ch.2012 USD Monthly GDP (pink), GDP (blue bars), all log normalized to 2021M11=0. Q3 Source: US Bureau of Labor Statistics, Federal Reserve, BEA 2022Q4 3rd release, from FRED, S&P Global/IHS Markit (nee macroeconomic consultant) (4/3/2023 release) and the authors’ calculations.
Current estimates are largely due to inventory buildup; final sales were flat. S&P Market Intelligence notes that, combined with their tracker forecast for quarterly GDP, the implied monthly GDP in March was down 0.2% mom.
Monthly GDP is due to be revised next month, so one might wonder how much the series is weighted. Figure 2 shows the evolution of monthly GDP in different years.
figure 2: Monthly GDP for April 3rd release (blue), March 1st release (tan), February 1st release (green), December 1st release (red), October 4th release (light green) , in billions of Ch.2012$ SAAR (left log scale) and coincidence index (blue, right log scale). Sources: S&P Market Intelligence (multiple issues) and Philadelphia Fed.
In my view, this suggests that there will be no recession throughout February. There are no guarantees.
