Business Cycle Indicators, March 1st

IHS-Markit just released its monthly GDP estimate for January, with 0% growth q/q. Bloomberg consensus for February nonfarm payroll shaved down to 400K, from 450K on 2/25.

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for February NFP (blue +), 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), all log normalized to 2020M02=0. NBER defined recession dates, peak-to-trough, shaded gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (3/1/2022 release), NBER, and author’s calculations.

From IHS Markit today:

Monthly GDP was flat (0.0%) in January following a similar reading in December. Underlying the flat reading in January were strong cross currents, including a large increase in domestic final sales (mainly personal consumption expenditures) and declines in nonfarm inventory
investment and net exports. …

IHS Markit forecasts 1% q/q growth SAAR, Goldman Sachs tracking estimate at 1.5%. GDPNow release of 3/1 (today) indicates 0% growth in Q1,

29 thoughts on “Business Cycle Indicators, March 1st

      1. Menzie Chinn Post author

        JohnH: So glad you have reappeared. When you last commented, almost a week ago, you wrote:

        I have to give the Russians credit for the most amazing invasion ever. Unlike the US invasion of Iraq, there were no bombs busting in air, no rockets red glare. BBC didn’t even show any movement of tanks, armored personnel carriers, or troop movements. Nada!

        But Blinken insists that there was an invasion. How did the Russians suddenly become invisible? How did the firing of rockets suddenly escape infrared detection? Simply amazing!!! The US may have stealth bombers, but Russia must have a whole stealth army! How did they pull that off?

        Were the army of war correspondents all caught napping, their ears firmly plugged, their eyes well masked? Or can it all be explained by a simple Orwellian redefinition of the word ‘invasion?’

        Are you now prepared to acknowledge that an invasion has occurred. Or are you going to assert that the invasion is merely a product of a disinformation program by government statisticians (recalling your assertion that government statisticians were suppressing median wage data).

          1. Moses Herzog

            Without reading ANY of these links by you and Menzie, I want to give my immediate reaction~~~I saw a BBC story about Asian Indian students studying in Ukraine. Their English was superb as they were talking to the BBC video crew (it may have been an Orla Guerin story) , they said they could NOT get on the Ukraine train going to west Ukraine. Because their skin color they couldn’t get on the westbound train. I agree, Ukraine will lose a lot of international “goodwill” if this proves to be prevalent that Asian Indians can’t get passage on the train.

          2. JohnH

            What’s interesting is that Israel is neutral in the conflict:”it is Israel that made the most memorable overture to Russia of a historical nature suffused with great poignancy. Israel prevented the US from transferring to Ukraine its Dome missile defence system which would have been a game changer in the present conflict on the plea that it did not want to act against Russia! …

            in a conversation at the Russian Foreign Ministry in Moscow, the Israeli ambassador was apparently asked by the Russian side whether his country wasn’t aware of what’s going on in Ukraine — where the calculus of power lies in the hands of Neo-Nazi groups acting with the support of the western countries.

            To be sure, Israel must be well aware of the situation. Ukraine is not like any other country for Israel. It was the country where the horrific massacres took place in late September 1941 when the invading Nazi army, SS and German police units and their auxiliaries perpetrated one of the largest massacres of World War II. “

            The importance of Nazis in the Ukrainian government is conveniently being glossed over by the infotainment media.

          3. Barkley Rosser


            There are no Nazis in the current Ukrainian government. You are just repeating a lie spouted by Putin.

            Israel is neutral because it has large Russian and Ukrainian populations, It is hoping to be an interlocuter between the two sides.

        1. JohnH

          Yes, an invasion occurred AFTER I wrote that. Blinken kept saying that an invasion had already occurred, when in fact none had yet taken place.

          And, yes, I misjudged Putin. Years of official prevarication from Vietnam through Iraq and beyond have made me sceptical of any “information” that comes from the foreign policy establishment. As SOS Pompeo noted, “we lie, we steal, we cheat.” It is part of a long tradition.

          1. pgl

            “Blinken kept saying that an invasion had already occurred, when in fact none had yet taken place.”

            That is a bold faced lie. You had a point about immigrants but you missed the fact that the Ukraine government is addressing this mistake. But to LIE about what our Sec. of State has said is giving aid and comfort to Putin.

          2. pgl

            Quoting Putin pet poodle Pompeo? You really need to get off this disgusting side show of yours.

          3. JohnH

            pgl…my earlier point had nothing to do with immigrants to Ukraine. Rather, it had to do with the European media’s blatantly racist racist reaction to immigrants in general…welcoming whites while rejecting those fleeing from its former colonies. Though much of the third world voted to condemn Russia’s invasion, many are quite aware that NATO is a white nation’s club expanding its “peace keeping” operations beyond Europe and into former colonies that it still regards as being within its sphere of influence and control.

          4. Noneconomist

            Speaking of “glossing over” history, John H., since you mentioned WWII atrocities, did you purposely omit the atrocities perpetrated by Stalin on/against Ukrainians, specifically the estimated 3-plus million who died as a result of famine. Not a famine caused by natural events but one directed from Moscow by Putin’s hero. Stalin?
            Or, are you simply naive enough to believe that an autocrat born in the Soviet Union, educated in Soviet schools, and rising star in the KGB who has now ruled his country for 22 years invaded Ukraine simply to rid it of Nazis?

        2. pgl

          I trust you did not expect JohnH of all people to ever admit he may have gotten something wrong. He gets a lot of stuff wrong but when he is called on it – he always goes on and on that the rest of us simply do not understand. He got this one quite wrong as a few other people did. But admit this? Of course not.

  1. macroduck

    End-of-year fed funds contracts are now priced for 100 basis points of Fed rate hikes, down from 150 prior to Russia’s latest invasion of Ukraine. Powell will give us a fresh look at the “official” view soon, but that view is probably quite changeable now.

    Credit spread widening and equity market losses mean the cost of capital is up despite the flight to the safety of Treasuries. The rising cost of raw materials is very likely adding to spread widening on the back of geopolitical risk. So there is a bit of tightening of credit conditions without rate hikes. The Fed’s accelerated pace of tapering is adding duration to the market, making longer dated corporate and mortgage debt less attractive. Thirty-year mortgage rates are up about 0.9% from year ago, 15-year about 0.8%. A 1 ppt y/y rise is generally good for a slowdown in home sales and a flattening of home prices three to six months out.

    Of course, some of the tightening in credit conditions is in anticipation of Fed hikes, some in response to tapering, so the Fed can’t expect to maintain these effects if it backs down too far in signaling rate hikes. Recent official comments sound like 25 bps in March is still fairly likely.

        1. Moses Herzog

          If they had this on a Los Vegas wager (what don’t they now??) 25bps would be MY bet.

          1. Moses Herzog

            Or even Las Vegas. That was one of my Dad’s “PLease act like you got a college degree” moments,

  2. macroduck

    “Oh, heck! Why not invade Moldova while we’re at it?”

    Moldovans and Romanians are probably looking around for candles, rations and weapons today.

    1. Steven Kopits

      The Moldovan bit comes from a map used by Lukashenko. This suggests a masterplan to retake the old Russian empire in one fell swoop, which seems about right at this point.

      This suggests then that the whole bit about Ukrainian neutrality is and was nothing more than a smokescreen. This notion that somehow Putin would not have invaded if only we had been nice to Russia twenty years ago is just completely false.


    Lets note, when you get financial elites at trading desks deciding on “price”, it is a loss of national sovereignty.

    1. Sherparick

      Actually, McConnell wants to “reform” e.g. scupper Social Security and Medicare, while keeping those regressive taxes coming in so as to fund even more tax cuts on wealth and capital. In this he he is a lot more clever than Scott because he is always vague and uses the word “bipartisan” before “reform.” McConnell’s remaining priority, assuming he gets his Senate majority back will be to keep as many judicial vacancies vacant as possible until a Republican is placed into the Presidency in 2024 and then fill those vacancies with more Federalist hacks.

  4. ltr

    Paul Krugman has repeatedly used the writing of Nobel Peace Prize winner Norman Angell, writing from 1910, in analyzing contemporary threats to peace. We have here a portrayal of how Krugman develops and redevelops ideas, finding relevant historical analogies. The columns are, to my thinking, superb:

    August 15, 2008

    The Great Illusion *
    By Paul Krugman

    July 1, 2012

    Europe’s Great Illusion
    By Paul Krugman

    August 17, 2014

    Why We Fight
    By Paul Krugman

    December 21, 2014

    Conquest Is for Losers
    Putin, Neocons and the Great Illusion
    By Paul Krugman

    March 1, 2022

    War, what is it good for?
    By Paul Krugman



    The Great Illusion
    A Study of the Relation of Military Power to National Advantage
    By Norman Angell

  5. ltr

    March 2, 2022

    China makes progress in preventing, defusing financial risks: official

    BEIJING — China has made continued efforts to forestall and defuse financial risks while supporting steady economic recovery, said the country’s top banking regulator Wednesday.

    In 2021, with threats in salient areas controlled, the macro leverage ratio decreased by about 8 percent, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, told a press conference.

    Asset expansion in the financial system, back at a comparatively low level, has reentered the single-digit range, said Guo.

    From 2017 to 2021, risky shadow banks were dismantled by 25 trillion yuan (about 3.95 trillion U.S. dollars), of which 11.5 trillion yuan were cut in the past two years.

    According to Guo, China’s banking sector handled about 12 trillion yuan in non-performing assets during the five years, with more than 6 trillion yuan handled in the past two years.

    Local governments have reported improved hidden debt situations, with bubble signs and highly leveraged financing trends in the real estate sector fundamentally reversed, Guo stressed, adding that “China’s resilience against external risks has further improved.”

    According to Guo, efforts have also met the reasonable and effective financing needs of the real economy and boosted the steady recovery and virtuous cycle of the economy.

    With nearly 20 trillion yuan of new yuan loans in 2021, newly-added bond investments by banking and insurance institutions totaled 7.7 trillion yuan.

    Meanwhile, the balance of medium- and long-term loans to the manufacturing sector increased by nearly 30 percent year on year, research and technology loans by 28.9 percent, and green credit by 21 percent, Guo added.

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