Business Cycle Indicators, at the Beginning of August

Consensus July employment growth at 200K, June GDPNow rises 0.5% m/m, and GDPNow at 3.9% q/q AR.

Figure 1: Nonfarm payroll employment, NFP (dark blue), civilian employment (orange), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), GDP (blue bars), 2023Q2 is GDPNow of 8/1, all log normalized to 2021M11=0. Source: BLS, Federal Reserve, BEA 2023Q2 advance release via FRED, S&P Global/IHS Markit (nee Macroeconomic Advisers, IHS Markit) (8/1/2023 release), and author’s calculations.

Except for industrial production, hard to see the recession in currently available indicators.

Weekly Economic Indicators (Lewis-Mertens-Stock/NY Fed) through 7/29 indicates 1.75% y/y growth (FRED link).

10 thoughts on “Business Cycle Indicators, at the Beginning of August”

  1. pgl

    My computer’s new feed has gotten to be so annoying that I have to wonder if it has been high jacked by stalker JohnH. After all it just told me that based on 30 year government bond rates, expected inflation has reached its highest level in 20 years. I thought that sounded incorrect and FRED assures me that it was wrong:

    https://fred.stlouisfed.org/series/T30YIEM
    30-year Breakeven Inflation Rate

  2. pgl

    I tracked down the story on how expected inflation had allegedly increased:

    https://www.msn.com/en-us/money/markets/inflation-worries-resurface-as-long-term-u-s-bond-yields-start-to-come-unglued/ar-AA1eKvCz?ocid=msedgdhp&pc=U531&cvid=03ef8b293b04412b985af68433e3df5c&ei=8

    Now it is true that nominal rates on 30 year government bonds have gone up since the last FRED reporting. But read on and this story also notes how 30 year TIPs yields (real rate) have also jumped. So breakeven inflation has not increased materially. Whoever wrote the title of this dumb article is almost as stupid as JohnH.

      1. Menzie Chinn Post author

        JohnH: You are truly the most inept interpreter of data I have met in my 30 years of teaching. You are comparing the year-on-year inflation as of June 2023 to the implied inflation rate for the next 30 years (assuming away risk and liquidity premia).

        1. Macroduck

          Johnny wants to prove he can make charts with FRED. Doesn’t know what the chart means, but he made it
          His parents must be so proud.

          1. pgl

            I don’t know if you remember the Buzz Charts that Jerry Bowyer used to produce for the National Review. Mark Thoma would routinely mock them calling them Fuzz Charts.

    2. pgl

      Dr. Chinn’s new post has the 30-year breakeven. Compare his graph to this:

      ‘On Thursday, the 10- and 30-year Treasury yields were on track to establish fresh year-to-date highs, trading at 4.18% and 4.3% respectively. The 10- and 30-year TIPS rates were respectively at 1.804% and 1.984% as of 12:30 p.m. Eastern time, the highest levels in over 10 years, according to Tradeweb. Subtracting the TIPS rates from the level of Treasury yields implies 10- and 30-year inflation break-even rates that are both above 2%.’

      Basically this says the nominal rate is 2.3% higher than the TIPs rate. Not even close to being the highest in the last 10 years. The writing in this article is a hot mess.

  3. pgl

    Chuck Rosenberg combines his dry sense of humor and his knowledge of the law to take down Trump’s stupid lawyers:

    https://www.msn.com/en-us/news/politics/it-s-nonsense-it-s-garbage-trump-s-latest-felony-defense-demolished-by-former-fbi-official/ar-AA1eJHeU?ocid=msedgdhp&pc=U531&cvid=d7edd90267cc47b68089144ca0103911&ei=9

    Appearing on MSNBC’s “Morning Joe” the day after Donald Trump was indicted by special counsel Jack Smith on charges related to attempts to subvert the 2020 presidential election results, former U.S. attorney and FBI official Chuck Rosenberg stuck a knife in attempts by the former president and his attorneys for saying the indictment is criminalizing speech. According to Trump and his legal team, he is being persecuted for actions that are protected by the First Amendment which Rosenberg dismissed as “garbage.” … “There is a technical legal word for it, and Mr. Barr used it — absolute nonsense,” he began. “Think of it this way: speech designed to commit a crime, speech designed to commit a fraud is not First Amendment protected speech. If I lie on my tax return, that is speech, but it is not protected by the First Amendment.”

    Wait – Trump lied on his tax returns! Lock him up!

    1. Ivan

      So if I were to claim that Trump is a pedophile, then that would be protected speech?
      What if I just said it as an “opinion”?

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