March 24, 2023

Christmas Eve Eve Business Cycle Conditions

Figure 2: Nonfarm payroll work, NFP (dark blue), initial benchmrked NFP (pink), civilian employment adapted to NFP idea (orange), private NFP reported by ADP (light green), total covered employment in Quarterly Census of Employment and Wages (dark red), all log normalized to 2021M11= 0. QCEW work seasonally changed by author utilizing Census X-11 after X-13 log change. Source: BLS, Federal Reserve, BEA, through FRED, and authors computations.
Notification that considering taxation/regulatory data, the initial benchmark modifications for March 2022 implies a greater trajectory for nonfarm payroll employment. I reveal this as the pink line (see conversation here).
Offered the historical connections, it makes more sense to put weight on the establishment series than the family series. The reality that the ADP series tracks the BLS NFP series strengthens the argument that work is really rising throughout H1

Figure 1: Nonfarm payroll employment, NFP (dark blue), Bloomberg consensus (blue +), civilian work (orange), industrial production (red), personal earnings leaving out transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and month-to-month GDP in Ch.2012$ (pink), GDP (blue bars), all log normalized to 2021M11= 0. Q3 Source: BLS, Federal Reserve, BEA, by means of FRED, IHS Markit ( nee Macroeconomic Advisers) (12/1/2022 release), and authors calculations.
Note that nonfarm payroll usage increased throughout H1, while individual income leaving out present transfers fell. NFP and civilian work trends throughout H1 do not fit well the recession narrative. However, there has been some discussion of whether nonfarm payroll employment series is properly measuring development. I display in Figure 2 cumulative growth rates given that 2021M11 for alternative series.

Consumption flat, at expectations. We now have the following picture of key indicators followed by the NBERs Company Cycle Dating Committee.

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