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Business cycle indicators as of mid-October 2022


Both industrial and manufacturing production rose 0.4% mom in September, beating market expectations (0.1% and 0.2%, respectively), indicating a return to growth.Here is a picture of key macro indicators, followed by NBER Business Cycle Dating Committeeplus IHS-Markit monthly GDP.

figure 1: Non-farm employment, NFP (dark blue), civilian employment (orange), industrial production (red), personal income excluding transfers in 2012 (green), manufacturing and trade sales in 2012 (black), consumption Ch.2012 Monthly GDP of $ (light blue) and Ch.2012$ (pink), both normalized to 2021M11=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published October 4, 2022), and author’s calculations.

GDP reported in the annual benchmark revision reported at the end of 2022 (the series is revised upwards to the first quarter of 2022) shows two quarters of declines.However, as mentioned earlier elsewhere, which is not the official definition of a U.S. recession; rather, it is determined by the NBER’s Business Cycle Dating Committee based on various metrics, followed by (often revised) GDP. Here’s the corresponding graph, showing official GDP (as of Q2), and the implied GDP level from the Atlanta Fed’s GDPNow nowcast (Oct. 14, 2022).

figure 2: Annual benchmark revisions (dark blue), civilian employment (orange), industrial production (red), personal income excluding transfers in 2012 dollars (green), manufacturing and trade sales in 2012 dollars (black) implied Nonfarm payrolls), consumption in 2012 dollars (light blue), monthly GDP in 2012 dollars (pink), official GDP through Q2 and GDPNow in Q3 (blue-green bars), all logarithms are Normalized to 2021M11=0. The lilac shading indicates dates associated with the H1 hypothetical recession. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published October 4, 2022), Gross domestic product now (Posted 10/14/22) and author’s calculations.

Note that the labor series continued to grow even during the slowdown in official GDP in the first half of the year, which some observers labelled a recession. Consumption and industrial production also increased during this period (by around 1% and 2%, respectively).Therefore, I am still Notes We are in recession in the first half of 2022.

Of course, this is a retrospective evaluation.High frequency assessment is here (although considering last week’s y/y growth). expect, Many economists see a recession.



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