2 of the methodologies discussed in the post on the current nowcasting provide insights into the state of the economy.
The WEI reading for the week ending 10/29 of 2.2% is interpretable as a y/y quarter development of 2.2% if the 2.2% reading were to persist for an entire quarter. The OECD Weekly Tracker reading of 0.9% is interpretable as a y/y development rate of 0.9% for year ending 10/29. The Baumeister et al. reading of 1.5% is analyzed as a 1.5% growth rate in excess of long term trend development rate.
This entry was published on November 3, 2022 by Menzie Chinn.
Figure 1: Lewis-Mertens-Stock (NY Fed) Weekly Economic Index (blue), Woloszko (OECD) Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims Weekly Economic Conditions Index for United States plus 2% pattern (green). Lilac shading signifies a hypothetical 2022H1 recession. Source: NY Fed through FRED, OECD, WECI, and authors computations.
The WEI has been fallen relative to 5 weeks back, to 2.2% from 2.8% for the week ending 9/24. The Weekly Tracker– at 0.9%– is a “huge information” technique that uses Google Trends and machine learning to track GDP.
The WEI reading for the week ending 10/29 of 2.2% is interpretable as a y/y quarter development of 2.2% if the 2.2% reading were to continue for a whole quarter. The OECD Weekly Tracker reading of 0.9% is interpretable as a y/y growth rate of 0.9% for year ending 10/29. The Baumeister et al. reading of 1.5% is interpreted as a 1.5% development rate in excess of long term pattern development rate. Typical development of US GDP over the 2000-19 period has to do with 2%, so this suggests a 3.5% growth rate for the year ending 10/29.
Since these are year-on-year growth rates, its possible we were in an economic downturn in H1 as one observer asserted a week earlier, however it (still) seems unlikely.
GDPNow for Q3 as of 11/1 is 2.6% q/q SAAR.