Business Cycle Indicators, May 15th

With industrial production for April released, we have a clearer picture of economic activity in that month. Here are some indicators followed by the NBER’s BCDC.

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. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (4/28 release), and author’s calculations.

As of today, NY Fed, Atlanta Fed and St. Louis Fed nowcasts for Q2 are -31.5%, -42.8%, and -48.07% (SAAR), respectively. IHS Markit is -39.5%. These nowcasts are a bit lower than the -32.3% mean forecast from the WSJ May survey (discussed here), and -32.2% mean forecast from the Q2 Survey of Professional Forecasters (released today).

33 thoughts on “Business Cycle Indicators, May 15th

  1. baffling

    a 40% drop in gdp! never seen anything like this. the GREATEST economic collapse in history. this could be substantially improved if we had focused on better treatement, safety equipment and testing options. we are two months behind where we need to be to get the public back out and safely growing the economy again. the trump administration spent two months in denial of the virus, for political reasons. if instead, they had ramped up our nations ability to test, trace and produce ppe materials such as masks, we would be much closer to reopening with people actually going out and conducting business. instead we have gop governors pushing for a reopening, with very few people going out due to lack of safety protocols. this lack of leadership from the white house will probably push a deep recession into a longer term depression. leadership counts in a crisis, and we had a absolutely none of it in the past four months. look to germany if you want to see strong leadership, directed by data and science, with the possibility of a safe reopening. at this point, we have republican governors willing to sacrifice their citizen’s lives in an attempt to restart an economy caused by trump incompetence.

  2. Barkley Rosser

    Whatever comes later, a swoosh or an inverted swoosh or a lazy J or a U or a W, wiggly or not, it is simply increasingly not viable to expect a real V. That implies a bounceback virtually symmetric to the decline. But this decline is the deepest and most rapid we have ever seen in US history. Given that many states are not reopening and those that are are doing so gradually mostly and those that did so earliest like Georgia are seeing litle uptickin business as consumers remain afraid and staying home, the idaa that once bottom is hit (which miight be happening now or pretty soon) we are going to zoom upwards at the vertiginous rate to match this record decline simply seems nearly impossible.

    I have seen some serious people like Vernon Smith arguing that the fundamentals of the US economy are sound so that once we get going (and assuming noe second wave of the virus) we have the pottential for some super high growth rate would seem to fit more likely with a U scenario, where the super growth waits awhile until everybody reopens and consumers regain their confidence. But that will at a minimum take several months, if it happens at all.

  3. baffling
    why is trump spending so much time and money on a vaccine, if in his words, we don’t really need it because the virus is going to go away anyways?
    notice all of his statements are simply two way hedges. maybe it will occur, maybe it won’t occur. EVERY statement he makes is completely noncommittal. this is because his true vocation is a conman, and his habit is to NEVER commit yourself to an incorrect position you may have to defend in the future. this is the leadership vacuum you can expect for another four years if he is reelected.

    1. pgl

      “President Trump said the U.S. will overcome the coronavirus crisis with or without an effective vaccine, saying that the disease will “go away at some point” either way.”

      I guess he is hoping all of Biden’s supporters just die. Oh wait – this virus is spreading faster in Trump country than in Blue State. Quick get a vaccine for all those MAGA hat wearing fools!

      1. macroduck

        The electoral college helps square Trump’s circle. However many red-state deaths there are, red states still have the same number of electoral votes in the November-January period. As long as attitudes toward Trump don’t change, the death toll by state doesn’t matter to him. His rhetoric is aimed at keeping his voters from voting rationally. Trump’s voter approval numbers are still about where they were in December.

        If the plague effects voter turn-out like weather does – Republicans turn out in higher numbers on bad days – Covid could be advantageous for Trump and Mitch, despite their obvious ghoul=like approach to the pandemic.

        1. baffling

          as i have said before, it became clear to me that trump is not worried about those who died, or could die. dead people cannot vote. this drives his calculus. this is why he is more worried about reopening the economy than protecting the citizens.

    2. pgl

      What killed me about Trump’s little presentation today was that he claimed he knew we needed a vaccine back on January 11. If so why did he wait until today to announce his team to push for a vaccine? Over four months wasted. Operation Warp Speed – what a farce.

      1. baffling

        from the FT, another example of trump wanting to claim both sides of the argument:
        “Shortly before the CDC visit, Trump said “within a couple of days, [infections are] going to be down to close to zero”. The US then had 15 cases. “One day, it’s like a miracle, it will disappear.” A few days afterwards, he claimed: “I’ve felt it was a pandemic long before it was called a pandemic.” That afternoon at the CDC provides an X-ray into Trump’s mind at the halfway point between denial and acceptance.”

        so he knew it was not a problem even though he knew it was a pandemic the entire time. such illiteracy is what is so attractive to people like sammy the schmuk. they actually believe all of his crap!

        1. pgl

          That is the entire point. Trump assumes that enough people are so incredibly stupid that no matter how much BS he piles up – he will win the Electoral College again. Which to Trump is all that matters. He does not care about Americans, his own voters, or anyone else. He cares about his own power to rip us all off. Which is the one thing he does very well.

  4. 2slugbaits

    Just a thought experiment. Suppose everyone goes back to work, but nobody buys anything. Will employers be able to meet payroll?

    A question. If all of those MAGA hatters were so upset about not being able to go to work and earn money, then how is it that they were able to afford to guzzle lousy beer and wolf down greasy burgers at those dive bars?

    baffling Bruce Hall is never going to admit that he’s wrong. He’s never going to fill out that job application at a hog processing plant. He’s the type that is perfectly willing to tell others to risk their lives and their health, but not a chance in hell that he’d ever do that himself. And Bruce will oppose any kind of extended unemployment insurance because he’s just sure that all those “takers” are just like that lazy brother-in-law of his who is always trying to mooch off of Bruce’s hard earned money. By God, Bruce had to suffer and work hard, so why shouldn’t everyone else! I know the type. It’s the politics of envy and that’s what motivates Trump’s base.

    1. pgl

      Bruce’s hard earned money???? We have both seen his incompetent analytical skills. What fool would pay Bruce Hall for anything?

  5. Willie

    Yuuuuge failure!

    Beats me if Hillary would have done better, since she would have had to contend with Moscow Mitch and his determination to harm Americans if it benefits the GOP. But, she certainly couldn’t have done any worse than the constipated orange guppy.

    1. 2slugbaits

      sammy Here’s a more detailed day-by-day timeline.

      Notice how Trump was praising China (publicly thank Xi on 24 Jan) and confidently predicting that it would never be a pandemic. And then a few weeks later he was claiming that he knew it would turn into a pandemic from the very beginning.

      As to that declaration of a “national emergency,” it’s pretty thin. Read it for yourself:

      And notice that on the very same day that he issued a “national emergency” he was asked why he disbanded the pandemic office in 2018. His answer was: “I just think it’s a nasty question….And when you say ‘me,’ I didn’t do it.” Now there’s real leadership.

      You asked if Trump should have “swung into action” on 11 January after China had recorded its first death. The short answer is yes. There were plenty of people in the US government who were at least aware of the potential problem. No one is saying that Trump had to make it his number one priority on 11 January, but he should have directed the appropriate offices to stay on top of it and keep him informed. He should have at least listened to the folks who were aware of what was going on in China. Instead, Trump told stories about miracles and then went golfing.

      The Obama Administration left Trump with a 69 page detailed action plan for a pandemic. The Trump Administration never even looked at it.

      1. pgl

        Sammy’s own little time line noted this from December 31, 2019:

        “Chinese Health officials inform the WHO about a cluster of 41 patients with a mysterious pneumonia.”

        Is Sammy so blind that he could not events listed in his own link that preceded Jan. 11, 2020? Or is Sammy just lying again?

    2. Baffling

      Jan 23 hubei province shut down.
      March 7 italy shut down.
      May 15, trump has yet to encourage or order a shutdown.
      May 15 trump still cannot get an adequate supply of ppe.
      May 15 trump still cannot get adequate testing for the disease.
      May 15 trump wants the nation to reopen as new cases continue to occur at high levels.
      Trump was far more worried about his reelection than solving the real problem. Placing prince jared in charge of operations was an abdication of duty. There is no substitute for a complete lack of preparation, as trump demonstrated so clearly.
      Keep complaining from the self isolation of your mothers basement sammy the schmuk.

    3. pgl

      This virus did not emerge until January 11? Lord Sammy – you are dumber than even Donald Trump is.

  6. Baffling

    “US coronavirus deaths to surpass 100,000 by June 1, CDC director says”
    And sammy the schmuk seems to think we should get out and interact some more. Apparently 100,000 dead by june is too low and too slow for his preference. He seems interested in sacrificing more people for “the cause”, whatever that may be.

    1. pgl

      I bet Sammy smiled when he heard it hits minorities the most – less Democrats that might vote for anyone outside of Trump!

      1. Willie

        We are headed for 200,000 dead by November, and it is in rural areas now. The political calculus may or may not change.

      2. noneconomist

        Disappointed in Sammy’s non follow up. Not because he’s got a clue. We know he doesn’t, so that’s not a problem. No, there’s no mention of Pelosi or Pelosi in Chinatown, which you would think would have been in his arsenal of “what abouts” (arrows in the quiver?) just waiting to be unleashed.
        At the very least, he should be on his way to Idaho to support Ammon Bundy (yes, that Bundy, one of the Cliven 14) in his fight to free Idaho from the tyrannical grasp of a conservative Republican governor.
        Sammy’s obviously on the wrong side of the mountains in Portland, being far more suited to life in a place like Burns (there’s a wildlife refuge close by that may need him) than with all those crazy libs hunkered down in Portland , worried only about spread of the virus and not about Sammy’s right to infect or not infect as he so chooses.

        1. baffling

          as long as the hospital system is not overwhelmed, i have come to the realization that i will simply let, no, encourage, all those anti lockdown protestors to get together and cause as much ruckus as possible. perhaps after their protest they can congregate at the local watering hole and plan their next event. as they hug and pat themselves on the back on the way to their cars, all i can say is, here’s ur sign…

          1. sammy


            What you said makes sense. The fact is the disease is here, widespread and contagious. Lockdowns will maybe only slow it down, but can’t prevent it. I read that 66% of the deaths in NY were people in lockdown. But to keep the lockdown on, you will destroy the economy, which causes more deaths from a range of pathologies, from suicide to starvation in other parts of the world, as well as our capacity to deal with the disease.

            The good news is that it is not that lethal, perhaps a 1 or 2 chance in 1000. Unless you are in the high risk group – those people should be protected via lockdown with as draconian a protocol as you wish.

            I agree with 2slugs that the end of the lockdown is no economic panacea. People are still scared and won’t immediately resume going to restaurants etc. Profit margins in most businesses are so slim that 50% or even 80% of revenues won’t cut it.

            The only solution is a vaccine or cure, but that is 6mos, 1 year or 2 years or never (we haven’t ever been able to develop a vaccine for a coronavirus). You can’t keep the economy closed down that long or there will be nothing left to support anybody, that is certain.

            So we have a choice – accept the deaths from coronavirus, or accept the deaths from economic collapse.

          2. baffling

            sammy, you imply the risk is symmetrical. it is not. if you are suffering economically, society can provide some resources to help you along until we recover. a lot of the economy is still operating-a misnomer you fail to admit or acknowledge. if you suffer a bankruptcy, there are things we can do to support you. on the other hand, if you fall sick, we have very limited treatment at this time. and if you die, there is absolutely NOTHING that can be done to reverse course.
            “The good news is that it is not that lethal, perhaps a 1 or 2 chance in 1000.”
            we do not know this. and why? because dear leader has been unable to crank up testing needed to validate this statement.
            “So we have a choice – accept the deaths from coronavirus, or accept the deaths from economic collapse.”
            this is a false choice, and not symmetrical risks, as noted above. this is a disingenuous argument coming from an unemployed loner living out of his mothers basement, asking others to take on the risk he avoids. sammy, my advice to you is quit listening to faux news all day. they are encouraging you to take actions that will risk your own life, or that of your family, for their own profit. we can reopen the economy when we are prepared, ie with a treatment/testing/tracing-we are not there yet, so why rush?

          3. 2slugbaits

            sammy So we have a choice – accept the deaths from coronavirus, or accept the deaths from economic collapse.

            This is a false choice. It’s the simpleminded argument that Sean Hannity and Laura Ingraham want Americans to believe. But’s it’s wrongheaded. It’s certainly true that there are costs to keeping the economy on ice, but a lot of those costs could be mitigated if the GOP wanted to listen to the Fed’s advice. Replacing lost income should be the easiest problem to solve. The tougher problems include the toll a total lockdown is likely to take on mental health, the long term effects on education, and even the dating & mating habits of teenagers and twentysomethings. But opening up too soon won’t do much to improve mental health and is likely to result in an even longer shut down of schools in the wake of an even more devastating second wave. As to dating and mating…well, I’m guessing that young people will find a way to get around that problem. They always do. I saw a story the other day where even the porn industry is finding a way!

            I don’t know of anyone who is saying that the entire economy should be in total lockdown until a vaccine or a cure comes along. That’s just a strawman argument. What we want is a thoughtful reopening that doesn’t jeopardize the slow, hard won progress that we’ve already made. For example, it might be a good idea if Trump told governors that they should follow the guidance of his own health experts. Is it too much to ask for each state to hold steady until it sees a 14 day consecutive drop in new cases? Is it too much to ask if each state holds off on large scale openings until that state falls below a 90% confidence interval around an Ro of less than 1.0 for two weeks? Is it too much to keep bars and tattoo parlors closed? Is it too much to ask Trump to set an example by wearing a mask? I realize that Trump is badly out of shape and has obvious COPD issues even when he’s not breathing through a mask (ever hear him wheezing when the microphone is up close or watch his chest heave up and down when he’s talking?), but he should at least show some leadership and wear a thin mask. There are smart ways to open the economy and there are stupid ways. Too many politicians have chosen the stupid way and will probably find themselves in an even worse position sooner than they think. All because they lack patience and courage.

            The problem with a lot of these Astroturf protests is that they really aren’t about wanting to get back to work. People forget that workers in many factories were demanding that their plants be closed because of unsafe working conditions. A lot of these protests are really about wanting to get back to partying and having fun on weekends. What happened when the Wisconsin Supreme Court overturned the governor’s order? The first things you saw were crowds of overweight white trash wolfing down greasy burgers and guzzling cheap beer. Were they worried about not having income (if so, why were they at a bar?), or were they more worried about getting drunk on a Friday night? Does that strike you as the kind of demographic that’s socially responsible and has earned the right to be taken seriously? Or how about those obese guys in camo holding their AR-15s in front of state capitols? Instead of egging on those MAGA lemmings Trump should be explaining why it’s important to meet the CDC guidelines for opening things up. There was a time in early April when Trump seemed to take things seriously. And his base seemed to follow him and took it seriously as well. I was actually starting to give him decent marks. But he quickly got bored and reverted to form, and once again his base followed his lead.

    2. Willie

      The virus could kill 250,000 Americans by mid-August. By November, a half million.

      1. baffling

        only a half a million dead by election day. from trumps perspective, most of them are minorities or older folks who will not vote for him anyways. dead people don’t vote, so he has no concern about the death toll. unemployed people can vote. this explains why he has spent far more time focusing on the economy rather than healthcare. his supporters do not seem to mind. exhibit sammy the schmuk.

        1. Willie

          Old people, especially uneducated old people, are Trump voters. Killing them off is not in Trump’s best interest. But do not forget that he is the one guy incompetent enough to go bust playing with house money several times.

  7. pgl

    As the coronavirus pandemic stretches past its ninth week, tensions are rising between the White House and the nation’s leading public health agency. In interviews with CNN, senior administration officials in Washington, as well as top officials at the Centers for Disease Control and Prevention in Atlanta describe a growing sense of mistrust and animosity between the White House and CDC over how quickly the US should reopen and how the government tracks data on the virus. In particular, Dr. Deborah Birx, coordinator for the President’s coronavirus task force, has become increasingly critical of the CDC, making clear in recent meetings that she is more than frustrated with the agency, according to two senior administration officials. Specifically, Birx believes the way the CDC gathers data on the coronavirus is antiquated, causing inaccurate and delayed numbers on both virus cases and deaths. Birx has expressed her agitation during recent task force meetings, where at least one conversation between her and CDC Director Robert Redfield has grown heated, according to a source close to the task force. Birx and Redfield have known each other for decades, due to their work on HIV research together. And while Birx defended Redfield to their peers earlier this year over the CDC’s faulty test kits, her tone toward him has shifted dramatically in recent weeks, according to multiple officials and a source close to the task force. There has also been significant tension between the White House and CDC over guidelines on how to reopen the country. Last week, Redfield was forced to apologize to administration officials after a draft of the CDC’s guidelines to reopening America were leaked to the media. The 68-page document outlined a detailed approach for how states, businesses and individuals could safely ease back into normalcy and were far more strict and detailed than the White House’s own road map toward a return to normal, a CNN review found. On Thursday the CDC published just 6 pages of graphics labeled “decision trees” as updated guidance. After spending “innumerable hours” on the guidance draft of recommendations, which they say was asked for specifically by Dr. Birx, two senior CDC officials tell CNN that the White House decision to shelve it for now in favor of a 6-page outline has only added to mounting frustration toward Birx within the CDC.

    Birx is still trying to do her job. Redfield has become another pathetic Trump sycophant.

  8. pgl

    Sammy replies. Of course it is only to spread more disinformation:

    “The fact is the disease is here, widespread and contagious. Lockdowns will maybe only slow it down, but can’t prevent it.”

    Slowing it down can save people’s live if we establish test and trace. Oh wait, Trump refuses to do that too. Never mind.

    “I read that 66% of the deaths in NY were people in lockdown.”

    Already been debunked. They may have had before being in lockdown. And lockdown includes people who have family members who had to get out there to keep my city moving. Of course some hillbilly living in the Oregon wilderness has no clue what happens in a real city.
    “The good news is that it is not that lethal, perhaps a 1 or 2 chance in 1000.”

    Where did you pull this alleged statistic? Oh yea from your usual “reliable” source – Fox and Friends!

  9. pgl

    I cannot decide which is the dumber statement. This from Donald Trump:

    Trump: Coronavirus testing may be ‘overrated’ and reason for high U.S. case count
    The president said the media had refused to report his “common sense” explanation for the large number of Covid-19 cases.
    “And don’t forget, we have more cases than anybody in the world,” he added. “But why? Because we do more testing. When you test, you have a case. When you test, you find something is wrong with people. If we didn’t do any testing, we would have very few cases.”

    Now I thought one could not get dumber than this but then Sammy wrote:

    “The good news is that it is not that lethal, perhaps a 1 or 2 chance in 1000.”

    Well if only 10% of the population gets this virus and 2% of the people who get it die, then you get Sammy’s probability. But note the probability of dying if one gets this virus is 2% not 0.2%. If half the population gets this virus then 1% of our population will die.

    Of course 3 million deaths does not matter to Sammy or to Trump as long as those who die were going to vote for Biden.

  10. pgl

    May 17, 2020 at 10:30 am
    sammy So we have a choice – accept the deaths from coronavirus, or accept the deaths from economic collapse.

    This is a false choice. It’s the simpleminded argument that Sean Hannity and Laura Ingraham want Americans to believe. But’s it’s wrongheaded.’

    Exactly right – of course Joe Biden has been saying this for quite a while. Biden also wrote an op-ed way back in January urging we take this virus on right away. Of course, he said Trump was not up to the task. That was exactly right as well.

  11. ooe

    the economy was already heading for recession before the pandemic hit evidenced by the fact the q1 of 2020 went down 4.8 % eventhough lock down measures were not imposed until mid March which is was the end of the quarter.

    As Peter Thiel indicated years ago, the “Trump’s administration will end a calamity.” this was the first instance he was right.
    1 millions unemployed
    2. the economy crashing.
    3. 1.60 million infected
    4. + 96000. Dead and counting…

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