Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version in Project Syndicate.
Here’re some business cycle indicators with deflated retail sales:
IP at 0.1% m/m vs. 0.3% consensus.
From ADP, one sees that employment growth has accelerated, small firm employment, and employment share, has decelerated.
From U.Michigan, preliminary sentiment at 48.9 vs. 46.1 consensus.
As is often the case, I cannot verify this claim made by EJ Antoni, Chief Economist for Heritage Foundation. What is true is that the price of natural gas (piped) has declined. But not for electricity. And roughly 42% of households are heated/cooled by electricity (a rising share), compared to 47% for natural gas. In addition, for lighting etc. you’d need to draw on electricity.
Heritage Foundation’s Chief Economist EJ Antoni speculates:
Which is good insofar as we’re going to get plenty more of it (see quote here). PPI upside surprise +1.1% vs. +0.7 m/m (Bloomberg). Core slightly below consensus (+0.4% vs. +0.5%). AIER’s Everyday Price Index near my estimate of (1.18% m/m vs 1.16% nowcasted).
Readers of Econbrowser know that I’ve put a lot of stress on using high frequency measures of uncertainty and risk to interpret recent events. One of those indices is the Caldara-Iacoviello GeoPolitical Risk index (GPR), referenced in too many of my posts. Matteo Iacoviello and his coauthor Jonathan Tong have undertaken a new project of invaluable service to the profession, developing AI-GPR, which uses LLMs (paper here).
Everyday prices nowcasted to outstripping measured CPI and subindices: