Consumption and personal income ex-transfers growth accelerate.
Figure 1: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary benchmark (bold blue), civilian employment (orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP (blue bars), all log normalized to 2021M11=0. Source: BLS via FRED, Federal Reserve, BEA 2024Q3 3rd release, S&P Global Market Insights (nee Macroeconomic Advisers, IHS Markit) (12/2/2024 release), and author’s calculations.
It’s difficult to see the recession that some observers argued started in July 2024, or even April 2024 — but the data are preliminary, so revisions could alter our views.
The PCE deflator and core PCE deflator were both 0.1 ppts m/m below Bloomberg consensus.
With third release GDP figures released yesterday, we have the following picture of alternative measures of output.
Figure 2: GDP 3rd release (bold black), GDO (tan), GDP+ (green), and GDPNow of 12/20 (light blue square), all in bn.Ch.2017$ SAAR. GDP+ level is growth rates cumulated on 2019Q4 GDP. Source: BEA, Philadelphia Fed, Atlanta Fed, and author’s calculations.
as it stands, PCE would add 1.76 percentage points to the growth rate of 4th quarter GDP, in the unlikely event that December PCE doesn’t vary from the October – November average…
((((16,192.9 + 16,237.5) / 2) / 16,113.0 ) ^ 4 – 1 ) * (16,113.0 / 23,400.3) = 0.0176367747
wherein all figures are 2017 CH $, the first two are PCE for Oct & Nov, the third & fourth one are 3rd quarter PCE, and the last one is 3rd quarter GDP, and hence we’re figuring the growth rate of PCE for the 2 months we have data for, and multiplying that by the fraction of GDP that PCE accounts for..