reader Steven Kopitzin response to Publish alternative indicatorswrote:
I’m very pleased with the forecast for the first half of 2022 and the role of gasoline/diesel consumption and VMT as indicators of economic stress or comfort, as the case may be.
Here’s a longer-range alternative indicator to highlight the fact that using VMT, gasoline consumption, or oil use, suggests that we have been and continue to be in a recession.
figure 1: Civilian employment from CPS (pink, right log scale), vehicle miles traveled (tan, right log scale), author seasonally adjusted oil consumption using Census X13/X11 ARIMA (light blue, right log scale) Amount and author’s gasoline supply sa (green, right logarithmic scale), all 2021M11=0. NBER-defined recession peak-to-trough dates are in gray. The hypothetical recession date in the first half of 2022 is in light blue. Sources: NHTSA, EIA via FRED, EIA STEO, NBER, and author’s calculations.
This contrasts with other traditional indicators such as the Chicago Fed National Activity Index. I plotted the CFNAI MA3 over the same time period, as shown in Figure 1 below, to show the evolution of the contrast. Note that the CFNAI MA3 did not breach the contraction threshold in the hypothetical first half of 2022.
figure 2: CFNAI-MA3. NBER-defined recession peak-to-trough dates are in gray. The hypothetical recession date in the first half of 2022 is in light blue. Source: Chicago Fed, via FRED, NBER.
While I didn’t find spam sales numbers over time, I did find monthly RV sales. Note that the first half of 2022 (actually through May) was a bumper sales year, surpassing 2021’s record amounts – and it’s easy to see why.
source: Marucci(2023). Data as of July 2023.
Now, if one wanted to extrapolate the early stages of the recession from the rapid decline in RV sales, one could make a reasonable argument (see my 2019 positions Using RV Sales to Predict Economic Recessions). I would argue, however, that the distortions associated with the pandemic make this claim dangerous.
Bottom line: If you still think predictions of a recession in the first half of 2022 are reasonable, I have a bridge in New York to sell you.
