The economic downturn is (probably) not here yet (nor was it likely here previously this year), employment most likely continued to grow, and real earnings are on average greater than they were before the pandemic. Crucial company cycle signs followed by the NBER BCDC continue uptrend in October, with exception of the civilian work series based on the family series
Recall, the nonfarm payroll series is normally considered much more informative regarding the business cycle than the civilian employment series, and is less variable. The establishment series is likewise subject to often substantial annual modifications, as more tax information comes in (e.g., from the Quarterly Census of Employment and Wages, QCEW). I have actually computed the series indicated from the initial benchmark revision (which applies to March 2022 information), and plotted it, together with the main series, and the family series adjusted to adhere to the nonfarm payroll principle.
Figure 1: Nonfarm payroll employment, NFP (dark blue), Bloomberg agreement as of 11/3 (blue +), civilian employment (orange), commercial production (red), individual earnings excluding transfers in Ch.2012$ (green), production and trade sales in Ch.2012$ (black), usage in Ch.2012$ (light blue), and regular monthly GDP in Ch.2012$ (pink), GDP (blue bars), all log stabilized to 2021M11= 0. Q3 GDP is from GDPNow for 11/1. Lilac shading denotes a hypothetical recession in 2022H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (11/1/2022 release), GDPNow (11/1) and authors estimations.
Note that the NBER BCDC puts primary focus on work and individual income (and not necessarily GDP).
Remember, the nonfarm payroll series is generally thought about much more useful concerning the company cycle than the civilian employment series, and is less variable. I have calculated the series indicated from the initial criteria modification (which applies to March 2022 information), and outlined it, together with the main series, and the home series adjusted to conform to the nonfarm payroll idea.
Figure 3: CPI deflated hourly salaries, for overall private (blue) manufacturing (tan), and leisure and hospitality (green), for nonsupervisory nonmanagerial tasks, in logs 2020M02= 0. NBER specified peak-to-trough economic crisis dates shaded gray. October CPI approximated utilizing Cleveland Fed nowcast as of 11/4. Source: BLS through FRED, Cleveland Fed, NBER, and authors estimations.
Notification that genuine average per hour revenues for leisure and hospitality employees have increased– and remained high– relative to pre-pandemic levels. Those interested in the equity elements of the restructuring of the labor markets must keep in mind. On the other hand, production has decreased almost 16% relative to pre-pandemic levels. Presumably, a few of this is driven by the strong dollar
.
.
Figure 2: Nonfarm payroll employment (blue), implied benchmarked nonfarm payroll employment (light blue), and family survey employment gotten used to nonfarm payroll concept (tan), all in 000s, s.a. Source: BLS by means of FRED, BLS, and authors computations.
Notice the continually upward trajectory in the facility series. While the home series flatten in the 2022H1, in the aggregate and gotten used to the NFP idea, the 2022M06 value is higher than the 2022M01 worth. These observations suggest no economic crisis in 2022H1, nor an ongoing economic crisis (although– informally– a decrease in the family series does seem to better presage a recessions with higher lead time than the establishment series).
There has been much commentary on the decline in genuine salaries over the previous year. Figure 3 shows the decrease in the CPI adjusted wage for nonsupervisory tasks in the personal sector.
These observations suggest no recession in 2022H1, nor an ongoing economic crisis (although– informally– a decrease in the family series does appear to better presage a recessions with greater lead time than the establishment series).
