GDP at 1.5%, PCE at 1.8%.
Figure 1: Instantaneous inflation (T=12, a=4) for monthly GDP deflator (black), core PCE (red), per Eeckhout (2023). NBER defined peak-to-trough recession dates shaded gray. Source: S&P Global Market Insights, BEA, NBER and author’s calculations.
Off topic, China’s deflationary spiral –
https://www.bloomberg.com/news/articles/2024-01-03/china-s-workers-suffer-biggest-drop-in-hiring-salaries-on-record?srnd=premium-asia
Falling salary offers in China. The concern is that falling offers lead to falling wages, to falling demand, falling prices, falling employment, falling wages…
I’m a little surprised that little Johnny hasn’t already outrage-linked to this. Johnny? Wages, Johnny?
“The concern is that falling offers lead to falling wages, to falling demand, falling prices, falling employment, falling wages…” Yeah, that’s the standard line that economists peddle as soon as there is the slightest hint of deflation. However, there are clearly instances, which economists conveniently ignore, where real wage have actually risen in a mildly deflationary environment. Maybe Tricky Ducky could illuminate us as to why one outcome is hyped, the other ignored.
Johnny, how do you manage to type with that huge chip on your shoulder? So first thing, you don’t get to assign homework. You’re nobody, just a troll who cheers for Russia’ invasion of Ukraine. How about you explain why Putin’s latest round of missile attacks is mostly against civilian targets?
Second thing, the article in question is about falling wages. Your response is to pretend the article isn’t there. “What falling wages? That’s just something economists make up!!!” No little Johnny, wage offers in China are falling. A real place, a real country, and wage offers are falling. And you’re all “Nothing to see here. Keep moving!”
Loser.
Gee, Ducky…did you forget your opening line: “China’s deflationary spiral?”
Like an astrologer scanning the skies for signs of God’s favor, Tricky Ducky anxiously scans the web for signs of China’s impending economic collapse. This is exactly what he did a couple years ago when neocons and their economist echo chamber were seeing nothing but an implosion of the Russian economy and certain victory over those dastardly Russians, who were keeping profits from their vast reserves of oil, natural gas, uranium, lithium, titanium and farmland to themselves and away from more deserving Corporate America and its oligarchs.
And then there’s the Eurozone. While Tricky Ducky loves to point out the woes and failings of the US’ bogeymen du jour, he exhibits no interest whatsoever in what US sanctions on Russia, along with destruction of Nord stream, have done to the European economy. “Euro zone economy likely entered recession last year.” As a result, little Trumps are sprouting up all across in Europe without much notice here. https://www.reuters.com/markets/europe/euro-zone-economy-likely-entered-recession-last-year-pmi-2024-01-02/
Per Ducky, Europe can twist silently in the wind as long as he can cheerfully imagine gloom and doom for the Chinese economy and satiate his schadenfreude!
Wow! Johnny has made up a whole fictional me, while ignoring all of my points. You can tell when Johnny has been caught with no answer – he answers anyway, with wild nonsense like this.
“Tricky Ducky anxiously scans the web for signs of China’s impending economic collapse.”
You make a lot of really STUPID statement but DAMN. He is noting the possibility that real wages have fallen by around 3% which is sad news for the average worker (which you claim to care about but you don’t) but that is a FAR cry from an economic collapse.
But if Jonny boy was not lying with extreme hyperbole, Iittle Jonny boy might just dry up and die. Of course NO ONE would miss him.
Could it be that Johnny has gotten a side hustle, spewing propaganda for China?
https://www.scmp.com/news/china/politics/article/3247256/chinas-propaganda-chiefs-told-sing-loudly-about-bright-economic-prospects
China propaganda chief has issued orders to his minions to make happy talk about China’s economic outlook. Simple facts like falling prices, falling wage offers and an extraordinarily high rate of unemployment among young adults are to be ignored. Talk about Europe, lie about real wages in the U.S., do anything but discuss the reality of the world’s second largest economy. Reality be damned! Happy talk for China and Russia, doom and gloom for the U.S. and Europe. That’s Johnny.
China’s propaganda chiefs told to ‘sing loudly about bright economic prospects’
Cai Qi, president’s chief of staff, calls for ‘positive publicity and public opinion guidance’
The PRC needs their own version of Lawrence Kudlow. Oh wait – we have their ideal candidate: JohnH!
Hey Jonny boy – we know you cannot read so let me help you out here:
“Companies offer 1.3% lower salaries to new hires from a year ago”
Nominal salaries FELL. The price level rose by 2%. So real salaries FELL by 3.3%. And Jonny boy does not care? You are a fraud. Pure and simple. Dumber than a rock, more dishonest than Trump, and a complete fraud. Take a bow!
I wish Xi could learn his lessons about free markets without hurting the Chinese populace. That is what I would like. You know, in the fantasyland I call my mind,
He sort of wants the free market planned economy and is not good at it. Human self interest is the most powerful driver of anything – including the economy. However, like a hyper-car, it can go right of the nearest cliff if it is not controlled – use the brakes, the gas, the steering; and know what each can and cannot do. The problem with Xi and all authoritarians is that he want the economy to do things it cannot and because he crush dissent nobody dares to tell him.
I been playing on “Discord” lately. Got suspended on Twitter, permanently suspended on Reddit, I refuse to use Facebook, other than to look at my favorite supermarket’s web page. TikTok too teenager cutesy for me, Snapchat too teenager cutesy for me…….. So I like the Discord so far. It appears to be my last stop to internet oblivion. That and Menzie’s grace-giving tolerance of me. And there are SOME smart people on Discord. i said SOME.
You got suspended on Twitter !!!
What did you do? – did you say that Musk is a dud?
I mean Twitter is a totally, completely, utterly, unrestricted, free speech site – unless you hurt Elon’s feelings.
https://www.bls.gov/news.release/empsit.nr0.htm
THE EMPLOYMENT SITUATION — DECEMBER 2023
Total nonfarm payroll employment increased by 216,000 in December, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today.
Now if one checks out that household survey reported employment fell a lot as did the labor force participation rate. Expected Lawrence Kudlow and Princeton Stupid Steve to claim the household survey is the more reliable measure.
From today’s jobs data, the weekly payroll index (aggregate weekly hours x average weekly earnings) was up 9.7% y/y in December. Can’t adjust for inflation yet, because we don’t have inflation data for December. In November, the inflation-adjusted payroll index was up 6.6% y/y. Both measures are high, relative to pre-Covid times:
https://fred.stlouisfed.org/graph/?g=1dHvf
The payroll index is a measure of how much households are bringing in each week through paychecks, and accounts for just over half of personal income. For lower and middle-class households headed by working-age folks, it is overwhelmingly the largest source of income.
We don’t have a long history for this series. Over the period we do have data, it doesn’t appear to lead recessions, but for what it’s worth, paychecks are certainly healthy in aggregate.
The index of aggregate hours rose at an annualized 0.8% rate in Q4. GDPNow puts growth at an annualized 2.5% in Q4, the NY Fed at 2.4%. From these estimates, we get annualized labor productivity growth of 1.6% to 1.7% n Q4. That is unlikely to be the reported figure, since productivity is calculated based on private output, rather than all of GDP, but it’s a decent ballpark estimate.
Productivity in Q3 was reported up 5.2% (SAAR); add 1.6% to that in Q4 and 2023 ended on a strong note. For all of 2023, labor productivity looks to have risen by just over 1% in 2023 after a 1.9% decline in 2022. And before anyone gets carried away about the cumulative drop in productivity over two years, take a look at the data:
https://fred.stlouisfed.org/series/OPHNFB#0
There was a big wobble in productivity due to the Covid recession. Now that the wobble is mostly passed, we are back to the post-2008 trend, or a little above. That’s disinflationary and good for wages, though not as good as theory suggests:
https://fred.stlouisfed.org/graph/?g=1dHNZ
Speaking of climate chang (we were, weren’t we?), it turns out we may be in the early stages of an event which had, till now, occured only twice in the past million years:
“If you look at other drill sites around the area we studied, the records show only two methane dissociation events in the last million years” said Steven Clemens, a professor of geological sciences at Brown and lead author of the study. “Here, we see it pretty much everywhere when we look at these small scales, particularly during times when Earth’s climate was in a warm phase. It’s clear that methane is cycling a lot more rapidly and more often between its ice and dissolved phase than we could previously detect.”
https://www.brown.edu/news/2023-03-27/methane-hydrates
A “methane dissociation event” is, crudely put, when methane turns from a frozen solid to a gas at a faster rate than it turns from gas to a sold. Methane is, as most of you know, a potent greenhouse gas.
Parts of Siberia are actually bubbling with methane these days, but the biggest concern is oceanic methane hydrates. The ocean floor contains vastly more methane than does permafrost, and oceans are warming. There are bugs that eat methane gas. An increase in methane release causes a proliferation of these bugs, which limits the release of methane into the atmosphere. The bubbling of Siberia’s permafrost means methane release has gotten ahead of the bugs.
Here’s the scary part… Oceanic warming is not uniform; some areas are warming fast, and that’s where the tipping point problem shows up. A fast-warming area of the ocean could release massive amounts of methane, faster than the bugs could keep up, accelerating the greenhouse effect. That would accelerate the warming of the oceans, releasing more methane. We don’t need a big rise in average ocean temperature to kick this off, just a big enough local rise.
This End of the World as We Know It announcement has been brought to you by the friendly people at ExxonMobil Corporation.
Good news on food inflation, and for Argentina:
https://www.bimco.org/news-and-trends/market-reports/shipping-number-of-the-week/20240104-snow
Argentina could use some good news.
In 2024, grain exports from the southern hemisphere could increase by 5-6%, driven by Argentina’s large harvests. This, paired with the above average sailing distances for Argentinian grain shipments, would support demand for ships in the panamax and supramax segments. While El Niño has been favourable for Argentina, it has led to a weaker wheat harvest in Australia and mixed conditions in Brazil. In Brazil, the forecasts for maize and soybean harvests have been gradually revised downwards. Nonetheless, if conditions do not deteriorate further, Brazilian grain exports should remain stable in 2024 due to high soybean and maize inventories.
Interesting stuff – thanks!
This could drive voter turnout in Florida:
https://www.theguardian.com/us-news/2024/jan/05/florida-proposal-abortion-rights-constitution-ballot
Maybe offset the purge of registered voters from voting rolls:
https://www.wmnf.org/almost-1-million-florida-voters-declared-inactive-after-law-purging-voter-lists/
“A Florida ballot measure to enshrine abortion rights in the state constitution seems to have enough signatures to head to voters come November – if advocates can defeat Republican efforts to stop it.”
De Santis is hell bent not only on taking away a woman’s right to choose but also on stopping the residents of Florida from having a say in how the rules are formed. De Santis after all is Trump’s minnie me.
Macroduck lets us know about a concern that wages in China might be falling. Rather than show some concern with regard to Chinese workers my mentally retarded stalker (JohnH) starts tossing his angry worthless word salad. Forget that and let’s look at some actual data:
https://tradingeconomics.com/china/wages
Wages in China increased to 114029 CNY/Year in 2022 from 106837 CNY/Year in 2021.
A 6.73% increase in nominal wages! Oh wait what is China’s inflation rate? Don’t ask my mentally retarded stalker as he has no idea. But I bet this is a real wage increase for 2022. Then again, this translates into less than $17,000 per year. So Chinese wages are not that great and one would hope they would continue to rise briskly.
I would go back to the Solow growth model and the convergence hypothesis but we know basic economics is over the head of my mentally retarded stalker and we would not want him to start bloviating angrily with lies about how I do not care about alleviating poverty.
Tricky Ducky is concerned about real wages falling in China? LOL!
Ducky is only concerned with making China look bad, as any devoted neocon does,
Dude – you make a lot of really stupid statements but DAMN. You seriously need emotional help – NOW!
and johnny is only concerned about making the usa look bad, as any devoted hack does.
but let us get back to the point. chinese policy is resulting in falling real wages in china. does that not concern you johnny? apparently the ccp is not that concerned with the success of the little people in china. why would you disregard falling real wages in china, and yet you make such big deal about slowly INCREASING real wages in the usa? why the hypocrisy johnny? really? why so asymmetric in your concerns? hack.
pgl wrote: “A 6.73% increase in nominal wages (in 2022!) Oh wait what is China’s inflation rate? ”
pgl would not say because he has no clue (or he’s afraid to admit to how good it was.) And Tricky Ducky has no clue as to what real wage growth in China is either…but his ignorance doesn’t stop him from exulting at the prospect of Chinese wages dropping.
As I said back when the mainstream economist echo chamber was delirious in their delusion that the Russian economy was going to implode in 2022, economists should stick with what they what they know…though come to think of it, they haven’t done very well forecasting the US economy either!
“pgl would not say because he has no clue”
Hey A-hole. After waiting for you to provide their inflation rate long enough, I have already noted it is near 2%.
Come on Jonny boy – we know you are mentally retarded but DAMN!
“As I said back when the mainstream economist echo chamber was delirious in their delusion that the Russian economy was going to implode in 2022”
if you are so confident in the russian economy, i suggest you invest your retirement funds in the russian market for the next decade. sounds like a wonderful investment strategy. toss in some russian bonds as well. long term. and if you are correct, virtually risk free. have at it, johnny.
Note to our host – JohnH has obviously become a worthless fountain of lies, hate, disinformation, pointless insults, and not a single shred of any real contribution on any topic. Far worse than PeakTrader, CoRev, and ltr ever were. So why hasn’t this clown been banned for his our mental health? Seriously.
pgl: While he is a fount of disinformation, he hasn’t engaged in misogyny, racism, homophobia yet (as far as I have noticed — I try to avoid close reading to save brain cells). Outright stupidity and willing disinformation is not part of the criterion. If you can cite an example of violations of any of the above, I will gladly ban (although then my students will lose a prime source of stupid comments, just like when CoRev was banned).
prof. chinn, i would argue that intentional disinformation should merit banning. as we have seen in this country since the emergence of trump, disinformation has very serious ramifications for our country. disinformation has been a dog whistle for misogyny, racism and homophobia in particular since trump came into office. it may be indirect, but the intention is the same as if it were directly stated. we had a direct assault on the us capital, against a free democracy and our constitution. in the years since, it has been disinformation that has been used to distort and distract from those heinous actions. it was an insurrection, and yet we have disinformation programs that have systematically tried to describe the event as a peaceful protest. i believe we should be taking this issue of disinformation more seriously. it is a threat to a free democracy.