Consumption, personal income, and actual manufacturing and trade sales of the St. Louis Fed are released today. The employment situation in July will be announced next Friday. This is today’s photo.
figure 1: Non-agricultural employment numbers released in June (dark blue), Bloomberg as of July 30 unanimously agreed on non-agricultural employment numbers in July (light blue +), industrial production (red), excluding 2012 Chapter 2 transfers Personal income (green), manufacturing and Ch.2012$ trade sales (black), Ch.2012$ consumption (light blue) and Ch.2012$ monthly GDP (pink), all logarithms are normalized Turn into 2020M02=0. The decline date defined by NBER is shaded in gray. Source: BLS, Federal Reserve, BEA, calculated by FRED, IHS Markit (nee Macroeconomic Advisers) (released on 7/1/2021), NBER and the author.
The stagnant growth of personal income excluding current transfers. Relative to the NBER peak of 2020M02, employment continues to lag behind, falling by 4.5% (logarithmic calculation). If the number of non-farm payrolls (NFP) in July increased by 900,000 as Bloomberg unanimously predicted, it would still fall by 3.9%.
Sales in the manufacturing and trading industries have fallen, as implied by the pre-retail food service industry (as described in this report) Posts in mid-July).
figure 2: Excluding retail sales of food services, 1982-84 US dollars (blue-green), manufacturing and trade sales were 1 billion. 2012 $ SAAR (black), all logs, 2020M02=0. Retail sales (excluding food) are reduced using CPI-all. The decline date defined by NBER is shaded in gray. Source: Census conducted by FRED and BLS, FRED and FRED of St. Louis conducted by NBER and calculations by the author.
Despite the slowdown, it implies that June will continue to decline (the return of manufacturing trade sales growth to the return of retail sales growth in 2019-2021 has produced an adjusted R2 About 0.84).
Retail sales provide little information about the changes in consumption in June, as shown below.
image 3: Retail and food services, 1982-84 USD (blue-green), consumption, 2012 SAAR (light blue), all in the 2020M02=0 log. CPI-all is used for retail sales. The decline date defined by NBER is shaded in gray. Source: Census conducted through FRED, BEA, and BLS, St. Louis Federal Reserve conducted through FRED, NBER, and the author’s calculations.
Personal income and expenditure data also provide information about inflation.
Figure 4: Personal consumption expenditure (PCE) inflation (blue), PCE core inflation (orange), PCE average (green), CPI-all inflation (red), all month-on-month annualized. Source: BEA, Dallas Federal Reserve, BLS calculated by FRED and the author.
The PCE inflation of 6.3% is much lower than the CPI inflation of 11.4% and the chain CPI inflation of 10.9%. The June reading was also lower than the April reading of 7.2%; unfortunately, the adjusted average inflation rate rose from 4.8% to 5.7%—so inflationary pressures do exist.
The level of the PCE price index has risen and exceeded the 2% trend defined in January 2020.
Figure 5: Personal Consumption Expenditure (PCE) Price Deflator (black), Cleveland Federal Reserve Nowcast (grey line), Wall Street Journal survey mean (cyan line), 2015M01-20M01 trend (light blue), 2020M01 2% trend (pink) ), all 2012=100, on a logarithmic scale. Source: BEA released on July 30, 2021, Cleveland Federal Reserve (accessed on July 29), Wall Street Journal July survey and author’s calculations.
The figure may not be obvious, but the 1.1% difference between the actual value and the trend value in June is the same in absolute value as the -1.1% difference in April and May 2020.
