Business Cycle Indicators as of 15 July 2020

Industrial production numbers are out today. Here are five key indicators referenced by the NBER’s Business Cycle Dating Committee.

Figure 1: Nonfarm payroll employment (blue), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2019M02=0. May observation for manufacturing and trade sales projected using log-linear regression of sales on retail sales ex.-food services over the 2019-20M04 period. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (6/26 release), NBER, and author’s calculations.

If one were convinced that these indicators (along with many others) were going to continue to trend upwards, one could imagine a recession declared as starting in 2020M02 (NBER peak) and ending in 2020M04 (trough). However, if there were to be a relapse in some of the indicators in July-August (see discussion here), one could imagine a longer contraction eventually being declared (some accounts say there’s an increasing view in the Fed along these lines).

23 thoughts on “Business Cycle Indicators as of 15 July 2020

  1. Moses Herzog

    What’s really strange about this situation is, Republican governor Kevin Stitt has worn the mask under his chin this whole time and he STILL got the virus!!!! Wouldn’t you think wearing the mask under his chin would have protected his lungs from the air particles??

    But it turns out, Kevin Stitt says one of his sons is to blame for giving him the COVID-19. What a great Christian conservative father, aye??? “Yeah, I never wore my mask on my face, but it was my son who gave me the virus”. I haven’t seen conservative values this strong since Reagan screwed around on his wife, Jane Wyman, and then unceremoniously dumped her. [Happy sigh….. good times……]

    1. sammy


      I have changed my mind on the mask issue. Every person, indoor, outdoor on a win swept beach, in your car, everywhere. If it increases confidence for people to go about life, and it seems to be working, mask up!

      1. Moses Herzog

        @ sammy
        What about the whole washing your hands thing?? Couldn’t this be a socialist plot, where the soap suds make it where the trigger on my gun becomes slippery, and then East Indian Tech Grad Students with H-1B visas invade my home to take the guns out of my gun cabinet and hand them to the deep state???

      2. Barkley Rosser

        The way to think about the mask thing is that not wearing one in a crowded indoor place is the moral equivalent of driving while drunk. Actually it is probably worse. After all, for the first half of this year we have had more than twice as many people die of Covid-19 as die in a whole year from both automobiles and guns.

        1. pgl

          I wonder if Sammy even knows why driving while intoxicated is a bad thing. He certainly does not give a hoot about people infecting other people with a deadly virus.

      3. noneconomist

        Last month Trump said some are wearing masks just to spite him.
        Well, consider: in my county, Romney was +1 in 2012, Clinton +3 in 2016. Based on what I’m seeing in my local grocery— with a heavy mix of shoppers 40 through 70’s—, there’s a whole lot of Trump spiting going on.
        Everybody masked today. Only two unmasked on my last visit.
        If that translates into anti Trump votes, he’ll be far worse here than -3 in November.

  2. pgl

    Or if one listened to the rants of Donald Trump today we are in the greatest period of economic growth ever. And of course the virus is about to be washed away.

  3. Moses Herzog

    This is fascinating considering I always have my account suspended after 3 days because I refuse to give them my phone number.

    That Jack Dorsey is a classy guy yeah?? He keeps this up and he’ll be up for the Zuckerberg humanitarian of the year award.

    Of course, I told the story many times about how a few years ago I had my Twitter account cancelled for criticizing a female sports journalist who regularly defended the Baylor board of regents after the rape scandal on the Waco campus, and then saying she thought it was “offensive” when the fans for a team competing against Baylor basketball had the “nerve” to chant about what happened at Baylor. So between loud chants during a basketball game and non-consensual sex, I guess that sports journalist knows which one really grates on her. And Twitter does also apparently.

  4. Moses Herzog

    Menzie, you might find this fascinating, or you might find it utter garbage– I just read that those on Twitter WITH a blue check mark of verification are NOT allowed to Tweet until they figure out the source/cause of today’s hacking mess, so, if you don’t have a Twitter verification right now—you have more freedom on twitter than those who got their blue checkmark. You can put this in the comment garbage bin or post it~~your call~~ just thought it was kind of interesting.

  5. Moses Herzog

    Oklahoma’s great Republican governor was chuckling (literally) this morning as he told people via “Zoom” that his son (after the governor himself had walked into endless public meetings not wearing any mask) had given him Covid-19. Now after Kevin Stitt blamed his son for being infected with the virus after attending hundreds of events sans mask, we had these numbers come out tonight related to hospitalizations.

    A long view of hospitalizations in Oklahoma, going back to April:

    There are now 166 ICU beds available, and there was an increase in hospital beds being used (not all of those ICU I don’t think, some general admission) of 77 today.

    The cases are growing exponentially. This is an earnest question, not sarcasm—how long do you think it is ’til those 166 ICU beds get used up??

  6. Barkley Rosser

    Well, industrial production looks like what I and some others here were forecasting some time ago would be the GDP pattern, the “swoosh” or “lazy J” or whatever, namely a slow immediate bounceback followed by a more rapid growth period. But the GDP one as of now is looking like a short-run V, whatever follows, with lots of us expecting that to slow down, sort of a flip version of the swoosh.

    1. Willie

      It is surprising me, and home builder confidence is good. Which means single family construction may not fall off like I expected. I’m a little baffled by the sharp bounce-back, especially when so many people are officially unemployed. I guess we don’t need those people’s work to have a recovery of some kind. It sure is below peak, though.

      1. baffling

        many of the unemployed were not working the kind of jobs that led to home buying, etc. much of it was hospitality, restaurant and retail. this is why a well run shutdown and controlled reopening could lead more quickly to a lasting rebound.

        1. Willie

          Which is not what we have. It is a shame. Cases and deaths are accelerating in Washington again. We have hit 1000 new cases in a day a couple times now.

    2. The Rage

      Right, accept it that was it, that sucked industrial production. 3rd quarter will feature a end to the bounce.

  7. Moses Herzog

    On a separate note, Kevin Stitt was also photoed this past weekend, with no mask, at a Vietnamese restaurant called “Kai” up around Tulsa. The restaurant had to shut-down upon notice of Stitt’s being infected with COVID-19, and had to test all employees and inform customers, while their doors were closed for business. And here is a photo of Republican Governor Kevin Stitt, at every true Okie redneck’s “home away from home”—Wal Mart..

    No word yet on if Kevin Stitt considers wandering around Oklahoma businesses refusing to wear a mask, and forcing those businesses he is photoed at not wearing any mask, as part of his “pro business” agenda. HIs capitol staff now has all got to be tested and that makes his government office very efficient as well. This is part of Kevin Stitt’s new state wide public service slogan campaign against COVID-19 “Do As I Say, Not As I Do”

  8. Moses Herzog

    It may just and only be a function of his professorial duties. Who knows??~~ maybe the topic brings on nausea for Menzie. But I have always “sensed” in Menzie a certain affection for currencies and exchange rates. “New Fama Puzzle” etc (of course I have some affection to Fama because his connection to finance, and just because the man’s mind is sharp as hell). Anywayzzzzz…… we have recently discussed inflation on here–and really how it’s nearly absurd to expect inflation in America anytime soon. I think an argument can be made, outside of war, that it’s even absurd to expect inflation in America anywhere on the 5-year time horizon. This was a pretty well written article. I’m not “the brightest bulb in the box”, so I gravitate to things that make important points in very simple ways—this article is one of those, and I thought, even though Menzie has a stronger appetite for complex things than I do, he might enjoy reading it as well:–I-say-show-me-the-currency-devaluation/

  9. Moses Herzog

    All of you know I am not a tech guru, after fumbling around, this is the best explanation I have seen up to now on the Twitter mess that happened slightly after imd-afternoon Wednesday 15th:

    Something here to me smells like a bribe….. How do “you” (Dorsey) have people running those internal mechanisms that aren’t going to be very suspicious or very sensitive to “social engineering” stunts?? Possible?~~YES. Likely??~~Kind of hard for me to swallow that one whole.

  10. Barkley Rosser

    Retail sales up 7.8% in June, and that is the month to month rate, not the far higher annualized one. Looks that the mini-V bounce held through June, more or less, but fully expect more noticeable slowdown after that.

    1. Barkley Rosser

      OOops. That should be 7.5% That is actually much lower than the May numbers, which were up 17.7%, again, month to month, not annualized. So, maybe consumption will be up by about half of the record increase we saw in May, maybe on the order of 3-4%, again month to month, not annualized. I do not know what that would imply for a GDP number, which we shall have to wait more on for an initial estimate.

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