Figure 2: Nonfarm payroll work adapted to preliminary annual benchmark modification (dark blue), civilian employment (orange), commercial production (red), personal earnings excluding transfers in Ch.2012$ (green), production and trade sales in Ch.2012$ (black), usage in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), Gross Domestic Output, GDO (blue bars), all log normalized to 2021M11= 0. Lilac shading denotes dates associated with a hypothetical economic crisis in H1. Source: BLS, Federal Reserve, BEA, through FRED, IHS Markit (nee Macroeconomic Advisers) (9/1/2022 release), and authors calculations.
For more discussion of GDP vs. GDO and other associated steps, see this post from the start of the month, and discussion of GDP annual modification, here.
With consumption, production and work steps rising throughout H1, and GDO trending sideways, it does not promise that H1 will be declared an economic downturn, specified as a broad based and relentless decline in economic activity.
Figure 1: Nonfarm payroll employment (dark blue), Bloomberg agreement since 9/30 for NFP (blue +), civilian employment (orange), industrial production (red), individual earnings excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), usage in Ch.2012$ (light blue), and month-to-month GDP in Ch.2012$ (pink), main GDP (blue bars), all log stabilized to 2021M11= 0. Lilac shading signifies dates related to a hypothetical economic downturn in H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (9/1/2022 release), and authors calculations.
Production and trade sales also rebounded in July, although the shift away from products is still apparent (although they are still 3.7% above NBER peak levels).
GDP and other indications seem to be at difference; however, if we look at GDO, they seem more consistent.
With August nominal consumption can be found in above consensus (m/m +0.4% vs. +0.2% Bloomberg), and usage and personal earnings continuing to rise, we have the following image of some key indicators followed by the NBER Organization Cycle Dating Committee.
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