Nowcasts, July 8th

GS vs Atlanta and IHS-Markit:

Figure 1: GDP  (black), May Survey of Professional Forecasters consensus (red), Goldman Sachs (pink square), Atlanta Fed GDPNow (green triangle) and IHS-Markit (light blue triangle), in billions Ch.2012$, SAAR. Nowcasts as of 7/8/2022. Source: BEA and Goldman Sachs, Atlanta Fed and IHS-Markit, and author’s calculations.

Note that even if the advance release for Q2 growth is negative, the mean absolute revision from advance to final vintage is about 1.26 percentage points (see BEA (2021)). Given the GDPNow is at -1.2%, and IHS-Markit is at -1.8% (both SAAR), the final growth rate could end up being positive. (This is also true for Q1, since the MAR is 1.23 percentage points going from third to final). See also this discussion of GDP revisions for the period around  the 2001 recession.


33 thoughts on “Nowcasts, July 8th

  1. ltr

    July 7, 2022

    Changes in the Relationship Between Income and Life Expectancy Before and During the COVID-19 Pandemic, California, 2015-2021
    By Hannes Schwandt, Janet Currie, Till von Wachter, Jonathan Kowarski, Derek Chapman and Steven H. Woolf


    Importance  The COVID-19 pandemic caused a large decrease in US life expectancy in 2020, but whether a similar decrease occurred in 2021 and whether the relationship between income and life expectancy intensified during the pandemic are unclear.

    Objective  To measure changes in life expectancy in 2020 and 2021 and the relationship between income and life expectancy by race and ethnicity.

    Design, Setting, and Participants  Retrospective ecological analysis of deaths in California in 2015 to 2021 to calculate state- and census tract–level life expectancy. Tracts were grouped by median household income (MHI), obtained from the American Community Survey, and the slope of the life expectancy-income gradient was compared by year and by racial and ethnic composition.

    Exposures  California in 2015 to 2019 (before the COVID-19 pandemic) and 2020 to 2021 (during the COVID-19 pandemic).

    Main Outcomes and Measures  Life expectancy at birth.

    Results  California experienced 1 988 606 deaths during 2015 to 2021, including 654 887 in 2020 to 2021. State life expectancy declined from 81.40 years in 2019 to 79.20 years in 2020 and 78.37 years in 2021. MHI data were available for 7962 of 8057 census tracts (98.8%; n = 1 899 065 deaths). Mean MHI ranged from $21 279 to $232 261 between the lowest and highest percentiles. The slope of the relationship between life expectancy and MHI increased significantly, from 0.075 (95% CI, 0.07-0.08) years per percentile in 2019 to 0.103 (95% CI, 0.098-0.108; P < .001) years per percentile in 2020 and 0.107 (95% CI, 0.102-0.112; P < .001) years per percentile in 2021. The gap in life expectancy between the richest and poorest percentiles increased from 11.52 years in 2019 to 14.67 years in 2020 and 15.51 years in 2021. Among Hispanic and non-Hispanic Asian, Black, and White populations, life expectancy declined 5.74 years among the Hispanic population, 3.04 years among the non-Hispanic Asian population, 3.84 years among the non-Hispanic Black population, and 1.90 years among the non-Hispanic White population between 2019 and 2021. The income–life expectancy gradient in these groups increased significantly between 2019 and 2020 (0.038 [95% CI, 0.030-0.045; P < .001] years per percentile among Hispanic individuals; 0.024 [95% CI: 0.005-0.044; P = .02] years per percentile among Asian individuals; 0.015 [95% CI, 0.010-0.020; P < .001] years per percentile among Black individuals; and 0.011 [95% CI, 0.007-0.015; P < .001] years per percentile among White individuals) and between 2019 and 2021 (0.033 [95% CI, 0.026-0.040; P < .001] years per percentile among Hispanic individuals; 0.024 [95% CI, 0.010-0.038; P = .002] years among Asian individuals; 0.024 [95% CI, 0.011-0.037; P = .003] years per percentile among Black individuals; and 0.013 [95% CI, 0.008-0.018; P < .001] years per percentile among White individuals). The increase in the gradient was significantly greater among Hispanic vs White populations in 2020 and 2021 (P < .001 in both years) and among Black vs White populations in 2021 (P = .04).

    Conclusions and Relevance  This retrospective analysis of census tract–level income and mortality data in California from 2015 to 2021 demonstrated a decrease in life expectancy in both 2020 and 2021 and an increase in the life expectancy gap by income level relative to the prepandemic period that disproportionately affected some racial and ethnic minority populations. Inferences at the individual level are limited by the ecological nature of the study, and the generalizability of the findings outside of California are unknown.

    1. ltr

      July 9, 2022

      COVID-19 widens gap in Californians’ life expectancies between ethnic groups: research

      LOS ANGELES — A new study has found that the life expectancies of different ethnic groups in California changed dramatically from 2019 to 2021, and that the racial and economic health disparities exposed by COVID-19 were the key factors.

      California, the most populous state in the United States, had 1,988,606 deaths from 2015 to 2021, including 654,887 from 2020 to 2021, while state life expectancy declined from 81.40 years in 2019 to 79.20 years in 2020, and to 78.37 years in 2021, according to the research * published Thursday in the Journal of the American Medical Association.

      But changes in life expectancy in 2020 and 2021 were not even when they were measured by race and ethnicity. Life expectancy is a hypothetical measure of how long those born in a specific year will live based on that year’s mortality rates.

      Researchers found that between 2019 and 2021, the life expectancy for Latino Californians fell by almost six years, from 82.5 years to 76.8. That plunge is twice the average decline of about three years for all Californians, and three times more than the decrease for white Californians of close to two years.

      Moreover, prior to the pandemic, white Californians had a lower life expectancy than Latinos, of 80.5 years, but in 2021 the expected life span of whites decreased to 78.6 years, higher than Latinos by 1.6 years.

      The life expectancy also decreased by nearly four years for African Americans in the Golden State, from 74.8 years to 71, and by three years for Asians living there, from 86.6 years to 83.5….


  2. CoRev

    Barking Bierka – the NYC Jerk provides a link, and it contains this:
    “So what’s my point? Just this: the payroll survey really is more reliable. It’s much larger than then household survey and therefore has less error.

    Yet if we are concerned over deflection economic points the article continues with this:
    ” Still, the household survey is perfectly valid, and in a different universe it might well be the one that gets headlines every month. If it did, the labor market would look a lot less bright right now.”

    Why does the article make this claim? Because:
    “(For June alone, the payroll survey says we added 372,000 jobs. The adjusted household survey says we added 131,000. The raw household survey says we lost 315,000 jobs.)”

    Time will tell, but if the FED levies another .75% rate increase, a future without a recession does not look good.

    1. Menzie Chinn Post author

      CoRev: Most macroeconomists who are interested in high frequency movements in economic activity put almost 100% weight on the establishment survey.

      1. CoRev

        Menzie, why did you point your comment on Kevin Drum’s comments? Is Kevin Drum wrong?

        Barking Bierka – the NYC Jerk, how did Menzie slap me down? I just quoted from your Kevin Drum reference. Why not take it up with him?

        1. Menzie Chinn Post author

          CoRev: Do you mean “why did I *post* your comment…”? I’m not sure what you’re getting at. But I think that it is probably wrong to put a lot of faith in the household series over the establishment (so, yes, I’m saying he’s more wrong than right on this point), when trying to infer month-to-month developments in economic activity. This is not just me, it’s kind of consensus, see Furman (2016). (I know I’ve cited this for you before, but I live in the hope you’ll actually read something I suggest for you that is more technical than a press release.)

          1. pgl

            As I listened to that podcast from Kudlow (see link in one of my comments) it struck me that he has never read Furman’s paper either. I bet CoRev follows those Kudlow podcasts under the illusion that Kudlow is an eminent economist. After all – he was Trump’s chief “economist”.

          2. CoRev

            Menzie, thank you for: ” But I think that it is probably wrong to put a lot of faith in the household series over the establishment (so, yes, I’m saying he’s more wrong than right on this point), when trying to infer month-to-month developments in economic activity. ”

            Clearly indicators of movements in economic activity are muddled. There is little doubt we are in a strange economic environment with recession tea leaf readings looking at a variety of indicators for deflections. I was trying to point out that data as a possible alternative source for a leading indicator, as I suspect was Kevin.

          3. Menzie Chinn Post author

            CoRev: Sunspots have also been pointed out as a possible indicator. However, if you are looking at real-time indicators, I’d be wary of using the household instead of the establishment.

        2. pgl

          Hey CoRev – why not take your stupid parade over to Kevin’s comment box? Are you afraid his readers will mock you or what?

          1. pgl

            “I was trying to point out that data as a possible alternative source for a leading indicator, as I suspect was Kevin.”

            Kevin Drum had two posts not one. Yea – he was quite confused in his first post but if the dimwit CoRev bothered to read Kevin’s second post, he might learn something. OK – CoRev has not read that 2016 discussion by Furman either.

            No CoRev just cherry picks old garbage as if he is dispensing gospel. Kevin Drum is at least trying to learn which I guess is something CoRev will never do.

    2. pgl

      Gee CoRev – our host has already slapped you down. But do pay attention – I noted the decline per the household survey WAY before your rapid barking. You might have noticed had you not been chasing your own tail!

      1. Macroduck

        Oh, my! Look at the nonsense focusing on a single data point from a single month can produce. If one were to look at two data series over a slightly longer period, at least some nonsense can be avoided. In Q1, household employment rose faster than payroll employment. In Q2, payroll employment caught up. Has household employment ever before outstripped payrolls for a while, only to stall while payrolls continued strong gains? Why, yes, it has, starting around June 2020 and running through early 2021:

        But that was sooooo long ago, I guess CoVid missed it. Or didn’t bother to look, since facts aren’t really the point for CoVid.

        It’s been a while since I linked to the works of Harry Frankfurt, but CoVid’s comment demands it:

        1. pgl

          “One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it.”

          One sure sign that one is about to read a bunch of BS – anything CoRev writes is guaranteed to be BS.

        2. pgl

          CoRev learns from something I wrote that Kevin Drum looked at both the payroll survey and the household survey for the latest month with the latter showing a one month decrease. Now even though I noted already Kevin put up a smarter second post, CoRev hangs onto one line from the 1st post without noting the rest of what Kevin wrote. Of course CoRev is ducking the close of Kevin’s follow-up post:

          ‘So what’s my point? Just this: the payroll survey really is more reliable. It’s much larger than the household survey and therefore has less error. Still, the household survey is perfectly valid, and in a different universe it might well be the one that gets headlines every month. If it did, the labor market would look a lot less bright right now. And who knows? Maybe the labor market is less bright than we think. Or maybe this is just a statistical artifact. The truth is that it’s pretty hard to know if a single month or two of data is reliable in either survey.’

          So what is my point? When CoRev says Kevin Drum is signing onto his abuse of one month’s worth of data from a very volatile series. CoRev is blatantly misrepresenting what Kevin Drum has written. But yea – this is what CoRev always does.

      2. Noneconomist

        To top it all off, “citizen of the world” CoRev has had to stand by while Boris. Johnson takes the blame for Joe Biden’s mishandling of the UK economy.
        His knickers were certainly in a bunch if he glanced at the CNN headline: “Boris Johnson leaves world’s fifth biggest economy in crisis”, knowing the British Trump had been sabotaged by countless Biden failures.
        More gobsmacking and seething followed. A CNN Lib/Dem had the nerve to write: “Every major economy has suffered from the pandemic’s lingering effects on supply chains, and the shocks to energy and food chains gelivered by Russia’s invasion of Ukraine.
        But the UK has it worse than most of its peers. Inflation hit a 40 year high of 9.1% in May, the highest among G7 economies and is forecast to climb above 11% later this year despite a series of interest rate hikes.”
        Then there’s Johnson’s beloved Brexit and the seeming related labor shortages and concurrent increased costs for doing business. The value of the pound has dropped, And “The rise in food and fuel prices has created the worst cost of living crisis in decades.” Petrol has soared to well over $8(USD)/gallon leaving even liberal/socialist/Marxist California far behind!
        Yet, no mention of the man who caused this, only anger directed at the great Boris, who was left economically powerless by American economic treachery.
        Why oh why are Brits so reluctant to say “Buggeroff Biden” instead of “Bye, bye, Boris”?

        1. Barkley Rosser

          Unfortunately for the Brits, they will probably not be able to undo Johnson’s worst policy outcome, the increasingly clearly disastrous Brexit. One reason it is good to see Johnson going out the door is that he had been on the verge of blowing up his agreement with the EU about Northern Ireland, an important if complicated matter. Good riddance.

  3. pgl

    “Honorable Supreme Court Justice Kavanaugh and all of our other patrons at the restaurant were unduly harassed by unruly protestors while eating dinner at our Morton’s restaurant,” a representative told Politico. “Politics, regardless of your side or views, should not trample the freedom at play of the right to congregate and eat dinner. There is a time and place for everything. Disturbing the dinner of all of our customers was an act of selfishness and void of decency.”

    Well we know where Morton’s stand. The right to privacy and women’s rights be damned. After all the right of arrogant justices like Kavanaugh to have a steak dinner is supreme. After all he likes beer!

    1. Baffling

      So supreme court justices can take action that impacts a person’s private life, but no action can be taken that impacts a supreme court members private life. Seems a bit hypocritical to me if one wants to crawl down this hole. My dad taught me there are consequences to your actions. Court members should accept that, or resign.

      1. pgl

        They got to eat their meal in peace. They never had to face the crowd but oh my they had to go out the back door. The horrors (not).

  4. ltr

    July 9, 2022

    China’s consumer inflation stable, factory prices ease

    BEIJING — China’s consumer prices remained stable in June, while factory-gate inflation eased for the sixth straight month, as the country’s efforts to promote the resumption of production and stabilize supply and prices have gradually paid off.

    China’s consumer price index (CPI), a main gauge of inflation, rose 2.5 percent year on year in June, said Dong Lijuan, a senior statistician with the National Bureau of Statistics (NBS), on Saturday.

    The core CPI, which excludes food and energy prices, gained 1 percent year on year last month. The figure stayed at a significantly low level, reflecting the fact that current consumer prices continue to be moderate, said Wang Qing, a researcher at Golden Credit.

    On a monthly basis, June’s CPI reversed the 0.2-percent decline in May to remain flat due to effective COVID-19 control and a sufficient supply of consumer goods, Dong noted.

    Food prices went down 1.6 percent month on month, expanding from the 1.3-percent decline logged in May, which lowered the monthly consumer inflation by about 0.3 percentage points, according to the data.

    Increasing supplies, improved logistics and weakening demand from stockpiling combined to weigh down the prices of vegetables, eggs, fruits and aquatic products in June compared with a month earlier, Dong said….

    1. ltr

      China’s consumer price index (CPI), a main gauge of inflation, increased by 2.5 percent year on year in June, data from the National Bureau of Statistics (NBS) indicated on Saturday.

      On a yearly basis, China’s producer price index (PPI) increased by 6.1 percent in June, a decrease of 0.3 percentage points from the previous month.

  5. pgl

    Sarah Palin is trying to become relevant:

    Former Alaska Governor Sarah Palin has criticized Russia for suggestions that the country could “claim back” Alaska amid the ongoing Russian invasion of Ukraine. Palin, who is running for Alaska’s single seat in the House of Representatives, told Newsmax on Friday that Russia is staking claim to resources that should belong to the U.S. and there are “things we can do about it.” Vyacheslav Volodin, speaker of the Russian State Duma and an ally of President Vladimir Putin, said on Wednesday that Alaska was part of Russian territory and his country could claim it back.

    Is Volodin even more insane than Palin? I suspect Putin had Volodin says this just saw the MAGA hat morons like Palin and Trump can pretend they are big and brave and Biden is weak. Which is kind of funny since Trump and his ilk have always worked for Trump.

    1. Barkley Rosser


      I think in that last line you meant to say that “Trump and his ilk have always worked for Putin,” Of course they worked for Trump.

  6. pgl

    NASA issued a statement rebuking cosmonauts’ display of a pro-Russian separatist flag on the International Space Station this week, a rare move for the agency that espouses the outpost as a place for international cooperation. On July 4, Russian space agency Roscosmos shared two photos on social media channels showing ISS cosmonauts Sergey Korsakov, Oleg Artemyev, and Denis Matveev holding flags used by pro-Russian separatists in Ukraine. The post congratulated the capture of what separatists call the Luhansk People’s Republic, located in Ukraine’s eastern Donbas region. “The entire territory of the Luhansk People’s Republic has been liberated,” Roscosmos said in the post. “Russian and Lugansk forces have established full control over Lisichansk – the last major city in the LPR!”

    Most people would decry this abuse of space missions to celebrate Putin’s war crimes. Of course JohnH and Bruce Hall applauded the cosmonauts while CoRev got all sexually aroused.

    1. Barkley Rosser


      Minor correction. I have no doubt those cosmonauts did not call it the “Luhansk Peoples’ Republic.” They almost certainly called it the “Lugansk Peoples’ Republic,” well all of that in Russian. But for Russians it is “Lugansk,” not “Luhansk,” which is Ukrainian, and, for better or worse, the Russians now indeed to control thst oblast.

  7. pgl

    Lawrence Kudlow once again proving he is dumber than even Princeton Steve (skip past the part where he praises Abe so you can get to the nonsense where he is predicting a recession):

    The Fed right now is more determined to fight inflation rather than recession, or so says Jay Powell who has recently regained his price stability manhood and his daily growing new hair on his chest, but today’s jobs report was not as strong as many think. While revised non-farm payrolls did increase by 300k, the household survey fell by 315k and over the past three months has dropped by 116k. This survey depends more on family members and small businesses and is frequently a leading indicator at turning points in the economy.

    I see Larry – the payroll survey is not to be trusted as you believe the household survey is a more reliable metric. Yes – the STUPIDEST MAN ALIVE!

  8. pgl

    A right-wing group in Missouri has launched a “woke heat map” documenting instances of “wokeness” in an attempt to fight back against “critical race theory” and alleged “grooming” in schools across the state. The group, dubbed “Liberty Alliance,” says it is “committed to fighting back against the Woke agenda that is permeating all across Missouri.” “The first step in fighting back is uncovering their crazy ideas – from Critical Race Theory to grooming toddlers with sexually explicit books,” the organization states on its website. “That is why we have officially launched the Woke Heat Map – an interactive tool designed to expose the insane actions of the radical Left. This map will alert Missourians of craziness happening in their own communities.”

    Liberty Alliance is not exposing insanity from the left as their little claims here are totally made up BS. But there are a lot of insane ideas from the right that these clowns are peddling.

  9. pgl

    A significant downturn in commodity prices could give the Federal Reserve cover to change its aggressive pace of planned interest rate hikes, according to a report from Capital Economics.

    Most of us will see this as good news but oh dear, this may just ruin the weekend for CoRev, Bruce Hall, and Princeton Steve.

  10. Ivan

    This is a great read – and very relevant to what goes on here in the debate and in society at large

    Empty barrels full of words – pulling debates and perceptions into a ditch. In a democracy perception is power, so those who crave power become masters of manipulating public perceptions. Truth, facts, reality – all so irrelevant if you master the manipulation of perceptions.

    1. Baffling

      Nice link. We have a couple of professional sophists on this site. And more than a few amateurs as well. They know who they are. More concerned with winning the argument than dispersing the truth to an audience.

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