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Chinese GDP Growth over the Xi Jinping Era | Econbrowser
Over this period, growth has generally surprised on the downside.Here is GDP expressed in constant 2015CNY, along with IMFWorld Economic OutlookOctober forecasts.Figure 1:Chinese GDP from October 2022 WEO (black), October 2022 forecast (gray-blue), October 2021 forecast (red), October 2019 forecast
Maximum AUROC Spreads as of 12/25/2022: Recession Ahead, and If So, When? | Econbrowser
In 2019, Fed economistDavid Millerundertook a comprehensive assessment of term spread predictive power for recessions (There is No Single Best Predictor of Recessions). For the 1984-2018 period, he found the following:Figure 2: AUROC Sample 1984 – 2018 fromMiller (2019).For a discussion of AUROC (Ar
The Wisconsin Outlook: The State Follows the Nation | Econbrowser
From the NovemberWisconsin Economic Outlook(released December 13):IHS Markit is forecasting a mild recession that starts in the last quarter of 2022 and lasts until the first half of 2023. The forecast expects real GDP to grow 1.8% in 2022 followed by a small decline of 0.2% in 2023, and modest grow
The Coming Macro Shock of 2023: China | Econbrowser
AsPaul Krugmannotes,“[Chinese President] Xi has abruptly ended his signature “zero Covid” policy, withall indicationspointing to a huge surge in hospitalizations and deaths that will stress health care to the breaking point; the Chinese economy seems set to face major problems over the next two or t
Guest Contribution: “The Global Economy as of End-2022” | Econbrowser
Today, we present a guest post written byJeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. Ashorter versionappeared at Project Syndicate.December 24, 2022— Economists spent most of 2022 convincing thems
Month-on-Month PCE Deflator Inflation: Has the Regime Switched? | Econbrowser
Core PCE inflation was at consensus, 0.2% m/m. Are we in a new inflation regime?Figure 1:Month-on-month inflation annualized, for CPI (bold blue), core CPI (tan), PCE deflator (bold sky blue), and core PCE deflator (light green). NBER defined peak-to-trough recession dates shaded gray. Source: BLS,
Christmas Eve Eve Business Cycle Conditions | Econbrowser
Consumption flat, at expectations. We now have the following picture of key indicators followed by theNBER’s Business Cycle Dating Committee.Figure 1:Nonfarm payroll employment, NFP (dark blue), Bloomberg consensus (blue +), civilian employment (orange), industrial production (red), personal income
GDP 3rd Release, GDO, GDP+, GDPNow etc. | Econbrowser
Here’s the picture: revisions up in Q3 GDP, and GDP+. Note that GDP+ indicates no downturn in 2022H1.Figure 1:GDP (bold black), GDO (tan), GDP+ (green), GDPNow for Q4 (red square), Goldman Sachs (12/23) (teal triangle), all in blillions Ch.2012$, SAAR. GDP+ level calculated by iterating on 2019Q4 GD
Weekly Macro Indicators thru 12/17/2022 | Econbrowser
Weekly indicators from Lewis-Mertens-Stock (NY Fed) Weekly Economic Indicators, and Baumeister, Leiva-Leon and Sims WECI and Woloszko (OECD) Weekly Tracker through 12/17, released today.Figure 1:Lewis-Mertens-Stock Weekly Economic Index (blue), OECD Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims
Guest Contribution: “Boosting carry with equilibrium exchange rate estimates” | Econbrowser
Today we are fortunate to present a guest post written byMichal Rubaszek(SGH Warsaw School of Economics),Joscha Beckmann(FernUniversität Hagen and Kiel Institute for the World Economy)Michele Ca’ Zorzi(ECB), andMarek Kwas(SGH Warsaw School of Economics). The views expressed in this paper are those o
“I acknowledge that it shows that the increase in multiple job holders is insufficient to account for the material part of increased jobs per the Establishment Survey” | Econbrowser
That is readerSteven Kopits acknowledginghis repeated assertion[1][2][3][4][5]that an increase in multiple job holders was an important factor in explaining the divergence between the household and establishment employment series.One can also have spent 10 seconds constructing this graph (reprised f
Yet More on Adjusting the CES, Private Nonfarm Payroll | Econbrowser
Looking at not seasonally adjusted and seasonally adjusted private employment from CES vs. QCEW and ADP.Looking at unadjusted data, CES data is 637 thousand above QCEW for June 2022; and is 837 thousand above ADP for November 2022.Figure 1:Change in private nonfarm payroll employment (blue), and pri
More on Adjusting the CES | Econbrowser
The debate over whether the establishment survey is mismeasuring employment growth over the April-June 2022 period continues, with thePhiladelphia Fedasserting the net job growth was only 10 thousand, vs. the roughly 1 million reported by BLS. The outcomes of their calculations are presented in the
More Deceleration: Weekly Economic Indicators thru 12/10/2022 | Econbrowser
Weekly indicators from Lewis-Mertens-Stock (NY Fed) Weekly Economic Indicators, and Baumeister, Leiva-Leon and Sims WECI, through 12/10; and Woloszko (OECD) Weekly Tracker through 11/26 (not updated).Figure 1:Lewis-Mertens-Stock Weekly Economic Index (blue), OECD Weekly Tracker (tan), Baumeister-Le
Business Cycle Indicators, Mid-December | Econbrowser
November industrial and manufacturing production both surprised on the downside — -0.2% and -0.1% vs. +0.1% and -0.1% m/m (Bloomberg). This is the resulting picture for some key variables followed by the NBER Business Cycle Dating Committee.Figure 1:Nonfarm payroll employment, NFP (dark blue), civil
Why the Increase in Multiple Job Holders Cannot Account for Most of CES-CPS Discrepancy | Econbrowser
ReaderSteven Kopitsasks me to “show us the math” for why the increase in multiple job holders cannot account for the majority of the discrepancy between net job creation from 2022M03 until 2022M11. Here it is:Figure 1:Difference in net job creation from nonfarm payroll series minus civilian employme
The Household-Establishment Surveys Job Creation Conundrum | Econbrowser
A week and a half ago,Kevin Drum notedearlier the disjuncture between job creation as measured by the household survey (civilian employment) and establishment survey (nonfarm payroll employment).My conclusion was that the empirical evidence suggested putting most — if not all — weight on the establi
“Do foreign yield curves predict US recessions and GDP growth?” | Econbrowser
Our short answer: yes.FromNBER working paper No. 30737(update of findings in thispost) by myself andRashad Ahmed, out today (abstract):This paper shows that foreign term spreads constructed from bond yields of non-U.S. G-7 constituents predict future U.S. recessions and that foreign term spreads are
Month-on-Month Headline, Core inflation Down | Econbrowser
Below consensus, headline m/m at 0.1% vs. 0.3% Bloomberg consensus, and core 0.2% vs. 0.3% consensus. Headline and core m/m annualized inflation in Figures 1 and 2, along with chained, sticky price, trimmed, and PCE.Figure 1:Month-on-month inflation of CPI (blue), chained CPI (brown), 16% trimmed CP
Some Empirical Definitions of Recession, around the World: An Incomplete List | Econbrowser
For those who don’t want to use a simple two-consecutive-quarter rule (which would declare the 2001 recession a non-recession).For the US:NBERJim Hamilton’s regime switching approach(see lastpost,index on FRED)Chauvet-PigerIndividual countries/economies:Euro area (CEPR/EABCN)[latest]France (Fr.Econ.
Deceleration (through 12/3)! | Econbrowser
Weekly indicators from Lewis-Mertens-Stock (NY Fed) Weekly Economic Indicators, and Baumeister, Leiva-Leon and Sims WECI, through 12/3; and Woloszko (OECD) Weekly Tracker through 11/26.Figure 1:Lewis-Mertens-Stock (NY Fed) Weekly Economic Index (blue), Woloszko (OECD) Weekly Tracker (tan), Baumeist
FT-IGM December Macroeconomists Survey – Fed Policy, Impending Recession (and More) | Econbrowser
Recession likely, modal response 2023Q1 or Q2. Median forecast q4/q4 2023 growth 1% (Survey responseshere; FT articlehere):Figure 1:Reported GDP (black), Atlanta Fed 12/6 nowcast (pink square), IGM-FT median forecast GDP level, based on Atlanta Fed nowcast (sky blue inverted triangle), 10th/90th per
So You Think We Were In a Recession in 2022H1? – Last Observations for 2022 | Econbrowser
At leastsomebodystill believes that as of a couple weeks ago.Figure 1, Top Panel:GDP (black), GDO (tan), GDP+ (green), all in bn.Ch.2012$ SAAR. GDP+ based on cumulated growth rates, scaled to 2018Q1.Bottom Panel:Coincident index (blue), nonfarm payroll employment (green), aggregate weekly hours (tan
Term Spreads and Recessions, Country by Country Evidence – a Very Incomplete Review | Econbrowser
Dr. Rosserasks what is the evidence for term spreads predicting recessions, with special reference to Japan. Here is my partial answer:Chinn and Kucko (2015)examine data over the 1970-2013 period, and obtain the following results:Source:Chinn and Kucko (2015).TheEconomistarticle on this subject ishe
10yr-3mo Term Spread and Recession, Down Under | Econbrowser
Here’s a picture of the 10yr-3mo term spread in Australia:Figure 1:10yr-3mo Australian Treasury spread, % (blue). ECRI peak-to-trough recession dates shaded gray. Source: OECD Main Economic Indicators, ECRI, and author’s calculations.A probit model estimated over 1968-2021 yields (assumes no recessi
GDP Nowcasts as of 12/10: Growth in Q4 | Econbrowser
We have Q4 nowcasts and tracking estimates as of 12/9, and implied Q4 from Lewis-Mertens-Stock WEI.Figure 1:GDP (black), GDPNow (sky blue), GS (pink), WEI implied (orange), Survey of Professional Forecasters (blue), in bn.Ch.2012$ SAAR. WEI uses average of y/y growth through 12/3 applied to 2021Q4 G
Real Wages during and Post-Pandemic | Econbrowser
While recent accounts have focused on the erosion of real wages with high inflation, what is true is that average real wages in the private sector, and amongs the lowest paid segment, leisure and hospitality workers, has risen since 2020M02.Figure 1:CPI-deflated real wage in private sector (black, l
Term Spreads around the World, as of December 6, 2022 | Econbrowser
Here is a snapshot of four key term spreads spreads through November (an examination prompted by a Deutsche Bank missive title “The Looming Recession” which dropped into my inbox today).Figure 1:Ten year government bond yields minus three month rates for US (black), UK (tea), Germany (orange), and J
Is the Establishment Series Overestimating NFP Employment? | Econbrowser
That is the proposition forwarded byKevin Drum at Jabberwocking. Verbatim:So: have we really created 2.5 million new jobs since March? I’m not sure I believe that.The graph he posted summarizes his argument succinctly:Source:Drum (2022).The stylized fact is that the household series adds almost noth
Short Horizon Inflation Expectations – Survey and Market Based | Econbrowser
One year horizon:Figure 1:CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected from Michigan Survey of Consumers (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink), mean from Coi
GS “Recession Watch” Odds at 35% | Econbrowser
From M. Abecasis/GS today:Source:M. Abecasis, “Introducing Our Recession Watch Tracker,”U.S. Daily, Goldman Sachs, December 2, 2022.The 35% figure contrasts with the 65% consensus from the October WSJ survey, and,the 50-50 chance by the Fed staff, and my term spread based estimates between 44%-56%.
Employment Release and Business Cycle Indicators | Econbrowser
NFP employment increase of 263K surprises on upside (vs. Bloomberg consensus of 200K). This is the resulting picture for some key indicators followed by the NBER Business Cycle Dating Committee.Figure 1:Nonfarm payroll employment, NFP (dark blue), Bloomberg consensus as of 12/1 (blue +), civilian em
Month-on-Month Inflation Seems to Have Peaked | Econbrowser
That’s the message from PCE deflators today.Figure 1:Month-on-month inflation annualized, for CPI (bold blue), core CPI (tan), PCE deflator (bold sky blue), and core PCE deflator (light green). NBER defined peak-to-trough recession dates shaded gray. Source: BLS, BEA via FRED, NBER, and author’s cal
Guest Contribution: “Let the WTO Referee Carbon Border Tariffs” | Econbrowser
Today, we present a guest post written byJeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. Ashorter versionappeared at Project Syndicate.The most important task in confronting global climate change is t
Business Cycle Indicators at the Beginning of December 2022 | Econbrowser
With the release of personal consumption and income for October, we have the following picture of key series followed by the NBER BCDC (along with monthly GDP from IHS Markit, formerly from Macroeconomic Advisers).Figure 1:Nonfarm payroll employment, NFP (dark blue), Bloomberg consensus as of 12/1 (
2022Q3 2nd Release, Alternative Measures of Activity, and a Recession of 2022H1? | Econbrowser
Here’s GDP, GDO, and GDP+ through 2022Q3, and monthly indicators through 2022M10. I (still) don’t see a recession in 2022H1.Figure 1:GDP (black), GDO (tan), and GDP+ (teal), all in bn.Ch.2012$, in logs, 2019Q4=0. GDP+ index calculated by cumulating q/q growth rates from 2018Q2. Hypothesized 2022H1 p
Guest Contribution: “The Strong Dollar, Global Inflation, and Global Recession” | Econbrowser
Today, we are pleased to present a guest contribution bySteven Kamin(AEI), formerly Director of the Division of International Finance at the Federal Reserve Board. The views presented represent those of the authors, and not necessarily those of the institutions the authors are affiliated with.In rec
Did the Yield Curve Predict a 2022H1 Recession? | Econbrowser
No.Figure 1:Forecasted probability of recession from 10yr-3mo term spread (blue), from 10yr-2yr term spread (tan), 10yr-3mo term spread augmented by FCI, foreign term spread (green). All models estimated over 1986M01-2022M11. NBER defined peak-to-trough recession dates shaded gray. Lilac shading den
“China markets tank as protests erupt over Covid lockdowns” | Econbrowser
FromCNN:China’s major stock indices and its currency have opened sharply lower Monday, as widespread protests against the country’s stringent Covid-19 restrictions over the weekend roiled investor sentiment.Here are data over the past week for China and HK stock markets and the CNY:The Hong Kong mar