A Peak in 2021 Q4? Business Cycle Indicators at the Beginning of August

If one took GDP as the determinant of NBER determined business cycles, this is what the picture would look like (normalizing on mid-Q4):

Figure 1: Nonfarm payroll employment (bold dark blue), Bloomberg consensus as of 8/1 (blue +), civilian employment (orange), industrial production (red), personal income excluding transfers in Ch.2012$ (bold green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), official GDP, 2022Q2 advance (blue bars), all log normalized to 2021M11=0. Source: BLS, Federal Reserve, BEA via FRED, IHS Markit (nee Macroeconomic Advisers) (8/1/2022 release), NBER, and author’s calculations.

The six plotted series are those focused on by the NBER Business Cycle Dating Committee, in addition to official BEA GDP, and IHS Markit’s monthly GDP (not currently on the list). Of the key six, nonfarm payroll employment (black) and personal income ex-transfers are given more weight.


22 thoughts on “A Peak in 2021 Q4? Business Cycle Indicators at the Beginning of August

    1. pgl

      Kevin Drum makes a list of the greatest achievements of President Biden to date. So which one does he put at #1?


      For years liberals have been saying that we can’t do any more good in Afghanistan and we need to withdraw—even if it’s ugly and allows the Taliban to take over. Well, it was ugly and the Taliban took over. But even now, a year later, it seems like we remain traumatized by those pictures of the first day, as if a rescue operation of this size under these circumstances could possibly start up without problems. The truth is that everyone showed monumental courage throughout the entire month. The military risked their lives daily and rescued 124,000 people—including all but a few hundred Americans—under the worst circumstances imaginable. Since then nearly a thousand more people have been quietly flown out. The State Department moved their desks to the Kabul airport and dealt with a huge crush of work made harder by sabotage from the Trump administration. Biden stuck to his guns despite enormous pressure to cave in and stay longer. Nothing is perfect. Big operations conducted under difficult circumstances always have a rough start. Desperate people always create chaos. Plans never survive contact with the enemy. The US certainly underestimated the incompetence of the Afghani army; the speed of the Taliban’s takeover; and the cowardice of Ashrif Ghani and other senior Afghani officials who abandoned their country during the airlift. But in the end, this was the biggest and probably most successful air rescue in history. It isn’t surprising that Republicans criticize it. That’s their job. But it’s stunning that even Democrats have mostly stayed quiet, refusing to full-throatedly support Biden and the withdrawal. It’s an act of both moral gutlessness and political stupidity.

      And yea al-Zawahri strutted around like he was the Prince of Kabul but now this horrific human being is dead.

      1. Ivan

        Given the cluster fu** of Trumps surrender to the Taliban (the “we will leave as long as you don’t shoot us in the ass on the way out” agreement) it is indeed a miracle that we only lost 12 soldiers at the very end. Biden actually negotiated us to stay longer than the original Trump surrender had stipulated. Any attempt to get that further extended would have been a disaster – and served no purpose. Competence matters – thank you Biden.

  1. pgl


    Koch network pressures Sens. Manchin, Sinema to oppose $739 billion tax-and-spending bill
    Americans for Prosperity, which is part of the larger Koch network, launched two ads on Saturday on its Facebook, Twitter and YouTube pages.
    The ads specifically call out Manchin and Sinema, encouraging the senators to oppose the legislation.
    The legislation is a pared-down version of President Joe Biden’s Build Back Better plan, which failed earlier this year after Manchin and Sinema opposed key elements of the bill.

    Americans for Prosperity? Excuse me – two rich dudes who will pay anything to make sure our kids will have an awful future. But hey – they pay Bruce Hall and CoRev quite well.

  2. AS

    Does not look like recession given the forecast of S&P 500 operating EPS as shown by SP Global.

    NOTE: The link below opens directly into an Excel Worksheet.


    1. AS

      I should say the link did open directly when I tested it. Search for SP Global SP500 Operating EPS Excel and you should find the link if interested.

  3. AS

    The Saturday/Sunday edition of the WSJ had an article on inflation periods, 1946 to 1948, 1973 to 1975, and 1978 to 1981. Year/Year CPI All inflation percentages were shown for 36 months.

    Interestingly if one uses 2021 starting in April 2021, the curve since then seems very similar the 1973 to 1975 curve. If the curve continues on the path, it looks like CPI All Y/Y could be at about 2.6% by the end of 2024.

    1. AS

      To be clear, I should have said, both the 1973 curve and the 1978 curve look similar in upward slope for the first 18 months, the 1973 curve then declines, while the 1978 curve peaks at month 25.

      So, to be objective, I should have said, hopefully we will follow the 1973 curve. Perhaps the next few months will give a clue as to which curve will be followed.

      1. Ivan

        A quick look at the explosive growth in oil company profits tells us all we need to know about why gas prices are so high. However, the supply problems are being solved, so we should soon begin to see additional reductions in oil/gasoline prices and their direct and indirect push on inflation. Combined with the resolution of other supply chain problems I am very optimistic that we will get below 4% within less than a year. If the Fed doesn’t wake up and get a grip soon, there could even be deflation down the road. Biggest monkey wrench is China – whose incompetent autocrat could cause new supply chain disruptions.

        1. pgl

          Companies like BP, Shell, and Exxon derive profits from both producing oil but also from refining oil into gasoline. We know oil prices are high but it also turns out refinery margins are incredibly high. Now the Biden haters want us to believe it is his fault for high oil prices (a really dumb statement no doubt) but they also want to deny the fact that refinery margins are obscenely high.

  4. pgl

    Kevin Drum must be reading some of the pathetically dumb comments on gasoline prices by the Usual Suspects here as he pokes some real fun at them as he documents how much gasoline prices have fallen in inflation adjusted terms:


    Adjusted for inflation, the price of a gallon of gasoline has dropped nearly a dollar. Isn’t that great?

    The are only two kinds of people unhappy about this. The first are climate hawks who think gasoline should be going for about ten bucks a gallon in order to keep drivers off the road.

    Second, and far more numerous, are conservatives who are suddenly discovering that we all know the president has no influence on gasoline prices. It’s funny that they didn’t seem to know that when prices were going up.

    And anyway, maybe the president does have some influence on gasoline prices. He can jawbone OPEC, which has worked moderately well lately. OPEC production is up and global prices of crude are down. And there’s also President Biden’s move to sell oil from the Strategic Petroleum Reserve, along with his recent decision to guarantee repurchases in future years, which is likely to stabilize the market. I wasn’t a big fan of this move, but who knows? Maybe it’s working better than I expected.

  5. pgl


    Pelosi and members of a Congressional delegation landed at Taipei Songshan Airport in the Taiwanese capital at just after 10:40 p.m. local time as part of her tour of Asia.

    This was a bold move for the Speaker of the House. Xi was making all sorts of vile threats and yet she visited Taiwan anyway. One would expect those who despise Xi to be applauding the Speaker. But wait – not a single word of praise from the likes of Princeton Steve. Oh that’s right – he does not want to jeopadize his chance to be on Fox and Friends.

  6. pgl


    KYIV, Aug 1 (Reuters) – The first ship to carry Ukrainian grain through the Black Sea since Russia invaded Ukraine five months ago left the port of Odesa for Lebanon on Monday under a safe passage deal described as a glimmer of hope in a worsening global food crisis. The sailing was made possible after Turkey and the United Nations brokered a grain and fertiliser export agreement between Russia and Ukraine last month – a rare diplomatic breakthrough in a conflict that has become a drawn-out war of attrition. The Sierra Leone-flagged ship Razoni will head to the port of Tripoli, Lebanon, after transiting Turkey’s Bosphorus Strait linking the Black Sea, which is dominated by Russia’s navy, to the Mediterranean. It is carrying 26,527 tonnes of corn.

    Ukraine intends to have 3 such shipments per day. 80 thousand metric tons of food per day will certainly help.

  7. pgl

    Bipartisan support for Pelosi’s trip to Taiwan?


    Several Republicans said Tuesday they support House Speaker Nancy Pelosi’s trip to Taiwan that has infuriated the Chinese government, which claims the self-governing island as its own. What they’re saying: “We support Speaker of the House of Representatives Nancy Pelosi’s trip to Taiwan,” a group of 26 Senate Republicans, including Senate Minority Leader Mitch McConnell (R-Ky.) and Minority Whip John Thune (R-S.D.), said in a statement. “For decades, members of the United States Congress, including previous Speakers of the House, have travelled to Taiwan. This travel is consistent with the United States’ One China policy to which we are committed,” the group added.

    Well – Pelosi had asked House Republicans to join her but not a single one of them decided to do so. I guess they were too busy trying to figure out how to help Trump get back in the White House.

  8. pgl

    The Republicans have a new twist on lying to people about taxes. It seems the new requirement that corporations pay at least 15% of their profits in taxes is somehow a tax on households who do not own any stocks because …. wait for it … the corporation might (just might) raises prices of their goods. OK! So I guess when St. Reagan trashed anti-trust enforcement, he admitted he wanted to tax and tax the little guy.

  9. ltr


    August 2, 2022

    Chinese mainland records 107 new confirmed COVID-19 cases

    The Chinese mainland recorded 107 confirmed COVID-19 cases on Monday, with 46 attributed to local transmissions and 61 from overseas, data from the National Health Commission showed on Tuesday.

    A total of 391 asymptomatic cases were also recorded on Monday, and 6,572 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 229,701, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases


    Chinese mainland new imported cases


    Chinese mainland new asymptomatic cases


  10. pgl

    I just got this email:


    Employment numbers have remained strong recently even as other economic indicators have faltered. We’ll discuss whether the trend continues when the Kenan Institute’s economic briefing returns at 9 a.m. EDT this Friday, Aug. 5, after the Bureau of Labor Statistics releases its monthly jobs report. The economy has contracted for two consecutive quarters, which many consider a technical recession, but the employment numbers to date suggest otherwise. Chief Economist Gerald Cohen will provide an update on the jobs figures and the overall economic picture, in addition to taking your questions. Various experts from the institute will appear in the coming months and offer insights from their areas of specialization. The briefings will occur on the morning that the employment report is released, usually the first Friday of each month.

    I do not know who these folks are but maybe I will turn in as I am sure it will be a lot more informative and honest that the garbage we see here in Princeton Steve comments.

  11. pgl

    Joe Manchin goes onto Faux News and shows us how it is done:


    Fox News anchor Harris Faulkner briefly lost it during a contentious interview with Sen. Joe Manchin (D-WV) on Tuesday, taking strong issue with the centrist senator asking her if she’s afraid of Democrats doing “something good” for America. “My father served,” an incensed Faulkner fired back at Manchin at one point, demanding that the West Virginia lawmaker not make it “personal.”

    OK what set this woman off?

    Appearing on The Faulkner Focus on Tuesday to explain his support for the newly named Inflation Reduction Act, Manchin parried most of Faulkner’s pointed questions about the bill’s tax structure, spending, and energy investments. For the most part, Manchin continued his appeal to the patriotism of both the anchor and the network’s viewers. “We need more energy today so—we also need to invest in the energy for the future,” Manchin declared early in the interview. “This is a balanced approach everyone has been talking about. Everyone is upset for whatever reason because they are afraid it is a political bill. It is not a Democrat bill. Not a Republican bill. It is not a green deal. This is a red, white, and blue deal, Harris.” Manchin also pushed back when Faulkner parroted Republican claims that the new legislation would raise taxes on middle-class Americans, noting that it merely requires large corporations to pay a minimum tax rate of 15 percent. “Who is paying any taxes that doesn’t have a corporation that has revenue of over a billion dollars a year? Not one person,” the West Virginia senator replied. “I am asking you a different question than you’re answering. I’m saying Americans $400,000 and below now are going to be taxed. Their taxes will go up,” Faulkner replied. “That’s wrong,” Manchin retorted. “That’s a lie. A pure, outright lie.” The conversation only grew more tense when Manchin taunted the Fox News host, at one point urging her to “be optimistic” and “be an American” when she said experts predict U.S. gas prices will rise around Labor Day.

    Yea Faulkner was lying but then she works for Faux News. I would not have appeared on her pathetic show but give Manchin a little credit and he came prepared to rebut her lies.

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