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Business cycle indicators, to February 2024

Personal spending met consensus and personal income was above consensus. Here's a picture of the key indicators followed by the NBER Business Cycle Dating Committee along with monthly GDP.

figure 1: Nonfarm employment (dark blue bold), civilian employment (orange), industrial production (red), 2017 personal income excluding current transfers (bold green), 2017 manufacturing and trade sales $ (black ), consumption of monthly GDP in Ch.2017$ in 2017 (light blue), monthly GDP in Ch.2017$ in 2017 (pink), second release of GDP (blue bar), as of 2/29 GDPNow for 2024Q1 (lavender box), all logarithms normalized to 2021M11=0. Source: BLS via FRED, Fed, BEA 2023Q4 Edition 2, Federal Reserve Bank of Atlanta, S&P Global Market Insights (Nigerian macroeconomic consultant, IHS Markit) (2/1/Released in 2024) and the author's calculations.

As of today, Q1 GDPNow is 3.0% (q/q AR).

Here are some alternative indicators: heavy truck sales, overlap index, and vehicle miles traveled.

figure 2: Heavy truck sales (blue), overlap index (tan), vehicle miles traveled, SA using X-13 (green), all in logarithmic form, 2021M11=0. Sources: Census Bureau, Federal Reserve Bank of Philadelphia, NHTSA (through FRED), and author's calculations.

While vehicle miles traveled trends sideways, it is not a reliable predictor or consistent indicator of recessions (see this postal). Heavy truck sales (including 12-month growth rates) are a good indicator. This indicator extends well beyond recession territory. The Philadelphia Fed's Coincidence Index shows the economy is not slowing.

It's hard for me to see a sustained decline in the December-January data.

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