So You Think We’re in a Recession as of Mid-July?

Employment situation release data for July, and Weekly data and Google/big data through July 29th, on the US economy (follow up on Part IPart IIPart III, Part IV, Part V, Part VI, as well as “So you think we might be in recession as of mid-June”, Part I and Part II) – a rejoinder to a reader’s view expressed (yesteroday!yesterday[my mistake – MDC]) “based on the indicators I track, yes, I think we are in continuing recession, and I expect a hard reset of the economy in H2.”

Here is a picture of series followed by the NBER’s Business Cycle Dating Committee, plus quarterly GDP and IHS Markit GDP.

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 8/1 (blue +), civilian employment (orange), 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), official GDP (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.

As seen above, the 528K increase in NFP far exceeded the Bloomberg consensus of 250K. In addition, the civilian employment series based on the household series also increased, 179K.

One is often worried about the effects of the BLS birth/death model for firms, which is a critical input into the sample adjustment process, around turning points. The civilian employment series adjusted to conform to the nonfarm payroll concept is not susceptible to this problem; it too moved upward, by 611K.

Figure 2: Nonfarm payroll employment (blue), civilian employment over age 16 (tan), and civilian employment adjusted to NFP concept (teal), all in 000’s, s.a. Source: BLS (July release), and BLS

The unemployment rate, not a central factor in the BCDC deliberations, also does not signal a recession when using the Sahm rule.

Figure 3: Unemployment rate U6 (black), Bloomberg consensus of 8/4 (black +), hypothetical rate necessary to trigger Sahm Rule (red square). Source: BLS via FRED, Bloomberg, author’s calculations.

In fact, the unemployment rate dropped from 3.6% to 3.5%.

These data pertain to mid-July, when the labor market survey is undertaken. For July overall, we can look to weekly data. The Lewis-Mertens-Stock Weekly Economic Index is still above trend:

Source: NY Fed via FRED, accessed 8/4/2022.

 

75 thoughts on “So You Think We’re in a Recession as of Mid-July?

  1. pgl

    a rejoinder to a reader’s view expressed (today!) “based on the indicators I track, yes, I think we are in continuing recession, and I expect a hard reset of the economy in H2.”

    Well that is only the 2nd dumbest statement from Stevie today. Stevie told us that Nixon was a good President? Stevie must have never heard of the Vietnam War and how candidate Nixon committed treason by undermining LBJ’s peace efforts in 1968.

    Reply
  2. ltr

    https://www.nytimes.com/2022/08/05/opinion/inflation-declining-gas-prices.html

    August 5, 2022

    Wonking Out: The meaning of falling inflation
    By Paul Krugman

    Inflation is coming down — fast.

    Gas prices, defying predictions of a nightmare summer for motorists, are leading the parade:

    https://static01.nyt.com/images/2022/08/05/opinion/krugman050822_1/krugman050822_1-jumbo.png?quality=75&auto=webp

    Less pain at the pump.

    The majority of gas stations in the United States are already charging less than $4 a gallon, and declining wholesale prices suggest that retail prices still have further to fall.

    Food prices are also coming down. Here’s the futures price for wheat:

    https://static01.nyt.com/images/2022/08/05/opinion/krugman050822_2/krugman050822_2-jumbo.png?quality=75&auto=webp

    Wheat futures are way down.

    And business surveys are suggesting a broader decline in inflation. For example, the widely cited Institute of Supply Management survey of purchasing managers shows that prices paid for raw materials are still rising, but at a slower rate than they have in many months:

    https://static01.nyt.com/images/2022/08/05/opinion/krugman050822_3/krugman050822_3-jumbo.png?quality=75&auto=webp

    Purchasing managers see much less inflation.

    All of this means that official data on consumer prices will almost certainly show much smaller increases over the next few months than the shocking numbers we’ve become accustomed to lately. But what will this improvement mean?

    I’ll get to the implications for economic policy in just a bit. But give me a minute to savor the political implications.

    Republican efforts to regain control of Congress have rested almost entirely on blaming Joe Biden for inflation — and gas prices in particular.

    Did Donald Trump, who is still the dominant figure in the G.O.P., attempt to overturn a legitimate election? Gas is over $5 a gallon! Are Republican judges and state legislators taking away rights women have had for decades? Gas is $5 a gallon!

    Now the party’s main election plank — pretty much their only election plank — is being sawed off at the base. I’ve been wondering what they’ll do. After spending many months doing all they can to dumb down the debate, Republicans will have a hard time suddenly pivoting to nuanced arguments about headline numbers versus underlying inflation….

    Reply
    1. pgl

      It is interesting that we have not heard much about gasoline and food prices from Bruce Hall of late. Of course these MAGA hat liars will somehow turn deflation into some Biden created EVIL.

      Reply
      1. Noneconomist

        Just about every place I go in Northern California, I see a familiar sign: Roadwork Ahead. Said work is funded by the extra gas tax and vehicle registration increase enacted in Brown’s last year in office. Work includes widening,straightening, repaving, tree removal, better lighting, more turn lanes, widened shoulders , et. al.
        Price for regular has dropped well over $1/gallon at my station. I buy about 8-10gallons/week, a savings of $8-10/week.

        Reply
        1. pgl

          “a savings of $8-10/week.”

          That could allow you to buy a nice bottle of California wine for each weekend!

          Reply
          1. noneconomist

            Even better, if I buy gas for my truck twice a month (never a full tank though), another $12 and another bottle!

          2. Noneconomist

            If you’re talking ratings, Bruce, the thrifty shopper can do quite well by exercising patience and by paying attention to what he purchases.
            At my discount store, there’s a good selection of coastal varieties that I buy on a repeat basis.
            Bonus: there’s even a wider selection of lower cost blends from Portugal, Spain, and Argentina. One on my shelf (two bottles) from Spain has a rating of 91. It was $7/bottle!
            At my market, they have a decent selection of Zins from the upper valley and foothills and some very good Barbera too. Occasionally these can be purchased for $10!
            I have in-laws far more wine savvy than I. They steer me to good buys at decent prices. I consider myself a wine (small c) conservative.

      2. Bruce Hall

        https://www.mynews13.com/fl/orlando/news/2022/07/19/diesel-prices-not-dropping-at-same-rate-as-regular-prices

        So, gasoline prices are only $1/gallon more than a year ago and diesel fuel is only $2.00/gallon more than a year ago. Woohoo! No “flow through” to other prices there.
        https://gasprices.aaa.com

        Wait until fall fool prices hit the shelves.
        https://ktla.com/news/ground-beef-prices-surge-as-farmers-sell-off-cattle-herds/
        Of course, the “climate change” crowd will be cheering that on because, you know, cattle farts.

        There is good news, higher interest rates have put the brakes on the housing market. The cost of business loans are going up so maybe investments will decline. That’s good for the supply chain, right? And increased taxes on corporations won’t impact prices because generous corporations will be happy to reduce their profits for the good of consumers, right?

        Oh, but Ukraine shipped some wheat. That’s a blip, for sure.
        https://www.reuters.com/markets/commodities/wheat-prices-soar-worlds-consumers-vote-with-their-feet-2022-08-03/

        So glad that you see the 2% inflation on the near horizon. All is well in Bidenland.

        Reply
        1. Noneconomist

          The half empty glass! Maybe emptying even more. A guy can hope, right Bruce?
          Nothing wrong with asking God for more unemployment, higher food prices, and a reversal of the downward trend in gasoline costs. God being on your side, things have to get worse.
          And, if all goes well, another natural disaster will strike California (keep your fingers crossed for another big fire, maybe an earthquake) and prove how libs have no business running a state.
          Me? I continue hoping my children and their spouses will continue to be employed (as will their children) and that their costs of living will subside, not increase. Crazy, sure. Happy that gas is at $4.84 here, not $6.29.
          Even hoping it will fall a bit more and that God holds off swinging the wrecking ball.

          Reply
          1. pgl

            Oil prices are still higher than they were a year ago and yet gasoline prices are back to their 8/1/2021 levels. Back then a few of us tried to show clueless Brucie that oil at $70/barrel should not translate into gasoline prices about $4 a gallon but we were seeing some obscenely high refinery margins back then.

            Of course blind as Mr. Magoo Bruce Hall refused to see that fact. Biden did and guess what – refinery margins have subsided. But of course a political hack like Brucie will never admit Biden came through on reducing obscene refinery margins.

        2. pgl

          Isn’t Kelly Anne Conway embarrassed to ask you to write such juvenile little rants? I would think your own family would plead with you to refrain embarrassing them this way. Yes gasoline prices were really low during the pandemic your hero did nothing about. And what was the unemployment rate two years ago v. today?

          Come on Bruce – you have proven over and over you are the dumbest troll ever. Take a vacation.

          Reply
        3. pgl

          Beef price – eh? In 2021, severe drought forced 40% of farmers to liquidate a portion of their herds, according to the American Farm Bureau Federation.

          Oh yea Biden’s climate change proposals cause this severe drought. Seriously Bruce – we have been over this before. Try READING your own links.

          Reply
        4. pgl

          “And increased taxes on corporations won’t impact prices because generous corporations will be happy to reduce their profits for the good of consumers, right?”

          Ah yes the Republican lie that higher corporate profits taxes are fully passed onto consumers. I guess Kelly Anne told Bruce that this is what the empirical economic literature says but this is certainly not true. Kelly Anne loves to lie to Brucie and the poor little boy smiles believing every lie she tells him.

          Reply
          1. CoRev

            Lil Guy, lies again. “Ah yes the Republican lie that higher corporate profits taxes are fully passed onto consumers.” If he’s writing he’s lying.

            There are at least 4 negative impacts from this kind of legislation.
            1) Corporate profits are diminished.
            2) Corporate growth is slowed.
            3) Corporate hiring is slowed.
            4) Corporate prices are raised.

            Lil Guy it’s now your turn to show the beneficial impacts of this kind of legislation.

            I’ll wait.

          2. pgl

            “CoRev
            August 7, 2022 at 4:27 am
            Lil Guy, lies again. “Ah yes the Republican lie that higher corporate profits taxes are fully passed onto consumers.” If he’s writing he’s lying.

            There are at least 4 negative impacts from this kind of legislation.
            1) Corporate profits are diminished.”

            CoRev pretends he is an economist. Well the other 3 claims are junk science. But it is nice to see that CoRev champions very rich people not paying taxes!!!

  3. pgl

    Only regret on the scaled down BBB bill the Senate will likely pass is that the carried interest loophole survives. But we got something else:

    https://www.msn.com/en-us/news/politics/schumer-defends-dropping-carried-interest-tax-change-to-win-over-sinema/ar-AA10lv01?ocid=msedgntp&cvid=9e454605e77349beb6809cb8d8bd594f

    Dropping the carried interest tax provision from the Inflation Reduction Act cost $14 billion in projected revenue, but Schumer made up for it by adding an excise tax on stock buybacks that will generate $74 billion in revenue.

    Reply
  4. pgl

    Given how Princeton Steve goes fishing for any statistic he can misrepresent, I decided to see what he was abusing for this “hard reset” BS and it was Job Openings. OK, there was a bit of a retreat in this figure over the past couple of months:

    https://fred.stlouisfed.org/series/JTSJOL

    Let’s stay tuned for what this looks like for July as I guarantee that if this increases, Stevie will forget to note that. He does have a propensity to lie after all.

    Reply
    1. pgl

      Job Openings as of June 2022 were at the same level as they were as of July 2021 – both being extremely high figures. I bet there is some Princeton Steve comment from last summer lamenting the economic woes from having too many job openings back then. But now he thinks the same level of job openings means we have a recession ready for a “hard reset”. His opinions do seem to be extremely malleable. But that is what you get when the world’s worst consultant pretends he knows macroeconomics and labor economics.

      Reply
    1. pgl

      There is some very significant loan that Alex Jones somehow made to himself. If anyone knows the details – please provide. His finances might just embarrass Donald Trump’s.

      Reply
    2. baffling

      the interesting thing is that under oath, Alex jones admitted that he lied about these conspiracy theories. the question is, do folks like corev and bruce, who listen to these fools, now admit they were doooped? or do they continue to listen to the fraudsters like some pawn?

      Reply
        1. pgl

          He presumes you believe every word Alex Jones says? Well the rest of us KNOW you follow this disgusting person like he is God.

          Reply
        2. Moses Herzog

          @ bruce hall
          If it quacks like a duck……. You talk very similar to CoRev, Alex Jones cultists out of the right side of your mouth, then two comments later plead innocence out of the left side of your mouth. And you do it thread after thread after thread. If you don’t want to be included in the nutjob crowd, quit espousing nutjob doctrine.

          Reply
    3. Macroduck

      Gotta leave some for the other families. This trial was just two families and the Lunatics* damages award today was another $45.2 million. Two more trials to come.

      Fingers crossed, the judge goes for pejury.

      * I was aiming at “punitive”, but when I saw what auto-correct had done, I left it.

      Reply
      1. Macroduck

        Jones needs to negotiate with he other families. His culpability is now established, and one of the two other cases is also in Texas, so under the same law. If he also lied in deposition in the other two cases, he triples his odds of serving time by going to trial.

        Reply
  5. pgl

    The Beveridge curve compares the number of unemployed people to the number of vacancies or job openings. Recessionary periods are indicated by high unemployment and low vacancies. Currently unemployment is low and vacancies/job openings are very high.

    And yet Princeton Steve says we are in a recession getting ready for a “hard reset”. Yea – his knowledge of basic labor economics is zero.

    Reply
  6. ltr

    https://mainlymacro.blogspot.com/2022/08/why-does-bank-of-england-appear-to-be.html

    August 4, 2022

    Why does the Bank of England appear to be ignoring its mandate?

    The Monetary Policy Committee has raised rates by 0.5%, and forecast both very high inflation and a recession. To many people this will come as no surprise. When inflation is high and expected to go higher, central banks raise interest rates to reduce inflation. It’s what they do. A recession is just an unfortunate consequence of that.

    However the Bank of England has a mandate set by the Chancellor. Significantly, that mandate is set out in the eighth paragraph of their summary about today’s decision. It is worth quoting what it says in full:

    “The MPC’s remit is clear that the inflation target applies at all times, reflecting the primacy of price stability in the UK monetary policy framework. The framework recognises that there will be occasions when inflation will depart from the target as a result of shocks and disturbances. The economy has continued to be subject to a succession of very large shocks, which will inevitably lead to volatility in output. Monetary policy will ensure that, as the adjustment to these shocks occurs, CPI inflation will return to the 2% target sustainably in the medium term.”

    It is an odd paragraph, because its first sentence is (rightly) contradicted by what follows. Every economist knows it would be impossible to hit 2% inflation every quarter or year, and foolish to try, especially when energy prices are rising so fast and unpredictably. For that reason, the key mandate is given by the last sentence, and you could add that the Bank should try and make this return to medium term stability as painless (in terms of excess inflation and lost output) as possible….

    — Simon Wren-Lewis

    Reply
  7. ltr

    https://news.cgtn.com/news/2022-08-05/Chinese-mainland-records-222-new-confirmed-COVID-19-cases-1cf61oA1SMg/index.html

    August 5, 2022

    Chinese mainland records 222 new confirmed COVID-19 cases

    The Chinese mainland recorded 222 confirmed COVID-19 cases on Thursday, with 162 attributed to local transmissions and 60 from overseas, data from the National Health Commission showed on Friday.

    A total of 317 asymptomatic cases were also recorded on Thursday, and 5,604 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 230,135, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases

    https://news.cgtn.com/news/2022-08-05/Chinese-mainland-records-222-new-confirmed-COVID-19-cases-1cf61oA1SMg/img/ec27a6fbe1e44133919bcefec1e15a26/ec27a6fbe1e44133919bcefec1e15a26.jpeg

    Chinese mainland new imported cases

    https://news.cgtn.com/news/2022-08-05/Chinese-mainland-records-222-new-confirmed-COVID-19-cases-1cf61oA1SMg/img/ad0b8d80909c4fde98ab5ad6ecd46083/ad0b8d80909c4fde98ab5ad6ecd46083.jpeg

    Chinese mainland new asymptomatic cases

    https://news.cgtn.com/news/2022-08-05/Chinese-mainland-records-222-new-confirmed-COVID-19-cases-1cf61oA1SMg/img/68df0b7e63f04a1e91f7f43bb3b66e19/68df0b7e63f04a1e91f7f43bb3b66e19.jpeg

    Reply
      1. pgl

        “Apple supplier Foxconn Technology Group is reportedly adding extra iPhone production capacity to an existing factory in India as part of its push to diversify its supply chain beyond China. Taiwan-based Foxconn, the world’s biggest electronics contract manufacturer, will soon start phone production in a new building at an existing factory near Chennai, capital of the southern Indian state of Tamil Nadu, according to local media The Economic Times, citing unnamed sources.”

        India needs to build up its manufacturing sector. Not only is Foxconn expanding where it produces iPhones, Apple has hired other contract manufacturers.

        Reply
      2. pgl

        The one thing about the assembly function of Foxconn – it is about 10% of the price Apple pays for contract manufacturing. Components made by other third parties (mostly from other nations) represent 90% of the price received by Foxconn. And the price we pay Apple is about 4 times the prices Apple pays Foxconn.

        Reply
      3. AndrewG

        Nice share.

        The title makes it sound like it’s about vanilla supply chain diversification (you know, 2021 Covid stuff), not Chinese politics. But that’s not it. MNC’s aren’t keen to find out what dumb stuff the Chinese government will do to them when they want to engage in some economic warfare with the West. Article mentions FOXCONN. Another Taiwanese company, Pegatron, is already under Chinese pressure. Trumpy trade stupidity? We can just ride that out, Trump has the attention span of a gnat. But if Xi wanted to do some damage, he could and he might well. The strategery coming out of Russia these days only makes the story more stark.

        And that reminds me of another thing: These trade potential trade disruptions aren’t about globalization being a bad idea. Far from it. Put diversification aside (which globalization actually facilitates). It’s about trust. You can trust democracies and some mild authoritarian countries (like Singapore) to play nice almost all the time. Establish reasonable rules and stick to them. There’s usually some political blowback at home if they don’t. But authoritarian countries don’t like rules. Elites in authoritarian countries like to reserve the right to trash their own country in order to exact revenge or expand their territorial holdings or something else dumb and from the 18th century. If Putin can threaten to cut off Europe from his country’s only real source of foreign reserves with no domestic push-back, Putin is truly free. And that’s the story here – it’s all about the freedom of authoritarian elites to pursue their own agenda in any way they please.

        Reply
        1. pgl

          “Article mentions FOXCONN. Another Taiwanese company, Pegatron, is already under Chinese pressure. Trumpy trade stupidity?”

          Pegatron! Yep – they are the other contract manufacturer making iPhones!

          Reply
  8. AS

    Well, I had forecasted nonfarm payroll to change by 251K. While reviewing the seventeen forecast categories, every single category beat the forecast. Seems like a robust job market, unless we are heading for the waterfall.
    The FWIW forecast for August nonfarm job change is 362k (with a standard error of about 127K). The August forecast compares to a recorded change of 528k for July. Can we beat a 362k forecast by another 100k to 200k? The July recorded change beat the Bloomberg consensus by 278k.

    Reply
  9. Macroduck

    Let us imagine that economic analysis relies, at times, on assessing the interaction of supply and demand. I know, it’s a stretch, but allow me some latitude. Can we glean anything from today’s data about supply and demand in July? Well, we know that labor income is one source of purchasing power (demand) and we know that labor hours are an input to supply.

    Demand side: The payroll index rose 0.9% in July. Assuming inflation doesn’t also rise 0.9%, that means purchasing power for hourly workers rose in July. There have been recent months in which gains in the payroll index did not exceed inflation, so this is good news for real demand.

    Supply side: Aggregate hours worked rose 0.3% in July and in June. Aggies have only declined in one month in the past 16 months. So while inflation has put a dent in real demand, there is no sign of trouble on the supply side. Labor input is climbing pretty steadily.

    How can it be that labor input continues to rise when GDP has fallen? Two possibilities – either productivity is falling or there is a measurement problem. This leaves us in a bit of a fix, as we won’t know whether productivity has actually fallen until we know whether there is a measurement problem for the inputs to productivity.

    Do we have reason to suspect any particular mismeasurement? Well, there is the record-sized mismatch between GDP and GDI to consider:

    https://fred.stlouisfed.org/graph/?g=SvKg

    Anything equally odd on the labor side? No. Household and payroll employment don’t match, but the mismatch is not unusually large:

    https://fred.stlouisfed.org/graph/?g=SvLx

    ADP is doing one of its occasional rejiggerings, so we don’t have June or July data. However, as of May, job growth continued uninterrupted in the ADP private employment series. That tends to confirm rising inputs on the supply side through Q1 and most of Q2.

    Reply
    1. pgl

      Interesting exercise but 1 question about this:

      “Demand side: The payroll index rose 0.9% in July. Assuming inflation doesn’t also rise 0.9%, that means purchasing power for hourly workers rose in July. There have been recent months in which gains in the payroll index did not exceed inflation, so this is good news for real demand.”

      Are you saying the quantity of labor rose by 0.9%? Your exercise then assumes no growth in nominal wages. Nominal wages did grow by almost 0.5% last month. Which of course makes your argument stronger.

      Reply
        1. pgl

          Indexes of aggregate weekly payrolls are calculated by dividing the current month’s aggregate by the average of the 12 monthly figures for the base year. Indexes are averages for production and nonsupervisory employees. For basic industries, the payroll aggregates are the product of average hourly earnings and aggregate weekly hours. At all higher levels of industry aggregation, payroll aggregates are the sum of the component aggregates.

          So it is nominal hourly earnings. Got it. Thanks!

          Reply
        2. pgl

          This nominal pay index rose by 9.4% over the past year. Now if inflation has been less than 9%, real pay is indeed higher than it was a year ago.

          Reply
    2. AndrewG

      Great points. But productivity could also be falling. Think about who’s being added to the job market these days. Low-skilled workers are first out and last in. This is a kind of inflation through quality. Participation hasn’t been skyrocketing but I think the point may still apply.

      Reply
  10. Macroduck

    By the way, the same politically motivated effort to claim the U.S. is in recession that has happened in comments here has also resulted in an editing slowdown for Wikipedia’s “Recession” article. Seem the article has mentioned both NBER and the two-quarters thingies since 2011, but a bunch of trolls started messing with the page to claim the U.S. is in recession now:

    https://en.m.wikipedia.org/wiki/Talk:Recession#ATTENTION_NEW_VISITORS_TO_THIS_PAGE

    Editing privileges have been restricted to restore order to the page. The main editor is apparently annoyed at having his page turned into a playpen for tantrum-prone toddlers. Anybody feel like fessing up?

    Reply
    1. pgl

      Editing privileges have been restricted to restore order to the page. The main editor is apparently annoyed at having his page turned into a playpen for tantrum-prone toddlers.

      Princeton Steve was cut off!!!

      Reply
    2. AndrewG

      I’ve come across dumber dummies who say that the definition of a recession has changed and it’s all a conspiracy. I doubt they’re your culprits though. Barely literate.

      Reply
    1. Moses Herzog

      Thanks for this link. I used to read him all the time when he had an “old school” blog. I must have had a RSS reader wasn’t being software updated or one of my other computers broke down and I totally lost track of him. I think I had a semi-large disagreement with him on his old blog and can’t even remember what it was now (I generally remember sticking to my guns on whatever it was and him being semi-civilized about the disagreement, he wasn’t rude or anything that I recall). But he was always a great read, so thanks for reconnecting me with his writings. He was on “blogspot” back in the day.

      Reply
    2. Moses Herzog

      Hahaha, obviously off of Sethi’s website. A possible replacement for weirdos like me fascinated by such things??
      https://insightprediction.com

      Looks interesting at first glance anyway. Interesting that the proprietor kinda “defends” PredictIt even though they were competitors I skimmed the blog article pretty fast but kinda confused by Kalshi’s place in all this. I don’t have a “smart” phone so [ insert giggling here ] uuuuhh, this one, maybe worth reading every couple weeks, er something??~~
      https://iemweb.biz.uiowa.edu Go Hawkeyes!!!! (my Dad attended)

      Reply
  11. pgl

    It seems a few Senate Republicans are as dumb as Princeton Steve:

    For the past month or so, Republicans have insisted that the U.S. economy is in a recession, a period of reduced economic activity that can be politically devastating for the party in power. Then, on Friday, the U.S. Labor Department announced the economy added half a million jobs last month, pushing the national unemployment rate down to 3.5% ― almost as low as it has as it has ever gotten, and a strong indication that the economy is not, in fact, in a recession.

    Still, Republicans insisted at a press conference on Friday, where they bashed Democrats’ plans to pass a major domestic policy bill, that there’s a recession going on. “We’re in a recession and this [bill] is going to make it worse,” Sen. Lindsey Graham (R-S.C.) said. HuffPost asked the five Republican senators at the presser how July’s job growth could happen in a recession. Sen. Bill Cassidy (R-La.) pointed out that in the first and second quarters of the year, the U.S. saw negative growth in gross domestic product, an important economic metric. “The definition of recession is negative GDP growth in two successive quarters,” Cassidy said. Cassidy has a point: If you do a Google search for the definition of the word “recession,” the top dictionary result calls it “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

    https://news.yahoo.com/republicans-economy-recession-added-half-191313120.html

    Reply
    1. pgl

      “We’re in a recession and this [bill] is going to make it worse,” Sen. Lindsey Graham (R-S.C.) said.

      Of course Senator I caught President Clinton having an affair could not explain how the bill in question will make things worse. Most economists assert it will lower the deficit, lower inflation a bit, and have no impact on economic growth. But what do economists know? Lindsey caught Clinton in an affair so give this Trump traitor a Nobel Prize!

      Reply
    1. AndrewG

      Thaler’s brilliant.

      He’s also a jerk. Half of his currency in the public’s mind is his calling fellow economists stupid. As if he himself is not an economist. As if most economists don’t find his brand of behavioral economics useful because they are stupid. Showing up in Adam McKay movies doesn’t help IMO.

      Reply
      1. pgl

        “Half of his currency in the public’s mind is his calling fellow economists stupid.” Maybe that is why Econned likes him.

        Reply
  12. Rick Stryker

    It’s a good thing that Mitt Romney didn’t criticize the Biden economy by saying that we should be seeing 500K job increases, because that would have triggered another multi-year rant from Menzie that that’s IMPOSSIBLE!!!

    Reply
    1. pgl

      Gee RickSter – is your latest rant the Abstract for something you are submitting to the Journal of Labor Economics. I’m sure its editor will not stop laughing for weeks.

      Reply
    2. Moses Herzog

      Rick Stryker gets upset when Professor Chinn hands him the FACTS of life. FACTS really really get Ricky Stryker upset. Let’s just try a social experiment here, and see how many times we can get Ricky Stryker to soil his pants:

      During donald trump’s time in office the following occurred:

      The economy lost 2.9 million jobs. The unemployment rate increased by 1.6 percentage points to 6.3%

      Coal production declined 26.5%, and coal-mining jobs dropped by 16.7% <<—one of hundreds of trump's broken promises to his illiterate fan base.

      The murder rate in 2020 rose to the highest level since 1997. <<—another broken promise on trump's "law and order" and "eliminating crime"

      The number of people lacking health insurance rose by 3 million. donald trump also passed zero laws to lower prescription drug prices for the elderly, broken promise

      The international trade deficit Trump promised to reduce went up. The U.S. trade deficit in goods and services in 2020 was the highest since 2008 and increased 40.5% from 2016. <<—broken promise

      Illegal immigration increased. Apprehensions at the Southwest border rose 14.7% last year compared with 2016. <<—- broken promise

      All of the above are undeniable facts. I think Ricky Stryker’s pants, right about now, smell like a truckstop urinal that hasn’t been flushed in two weeks.

      Reply
    3. pgl

      I was wondering why you got your panties all twisted up!

      Don’t Defend Factoids as Facts

      In this era of the internet, it’s important to remember that the barriers to circulating misinformation are very low. Here is Governor Romney making a factual assertion, as quoted in Salon (see also WSJ):.

      “We should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery.

      This is patently, wrong, as discussed in this post. But here is frequent commenter Rick Stryker trying to change the terms of debate:

      Reply
    4. pgl

      “So kids, don’t be a “Rick Stryker”. Admit when you’ve made a mistake.”

      OK, this was so unfair for Menzie to say. After all, Princeton Steve and Bruce Hall make mistakes several times a day. And they NEVER admit they made a mistake.

      Hey Rick – you belong to a really special club there.

      Reply
    5. 2slugbaits

      Rick Stryker As I recall Mitt Romney said we should be seeing 500K per month. Seeing 500K in one particular month is not quite the same thing.

      Reply
    1. pgl

      Labor Force Participation Rate?

      Try graphing the employment to population ratio as it did increase. And anyone who has actually READ this blog would know the household survey is more volatile than the payroll survey. But not Bruce Hall – he cannot read.

      BTW every other person knows that labor supply was depressed by Trump’s incompetent approach to COVID19. Everyone but the Village Moron Bruce Hall.

      Reply
    2. pgl

      “Yet, unemployed people finding new jobs is not the only way in which the unemployment rate can fall. It can also fall because some of the unemployed are no longer looking for work and have dropped out of the labor force altogether. If so, then a falling unemployment rate is not necessarily an indicator of renewed economic strength, but could indicate structural weakness within the job market.”

      I wrote something like that back in 2002 when your economic guru Kudlow the Klown was applauding falling unemployment even as the employment to population was falling.

      Now if the same thing were going on now you might have a point. But here’s the thing – the employment to population ratio is rising. As has the labor force participation rate somewhat.

      Now anyone who quotes this now as a sign of economic weakness has to be the DUMBEST PERSON EVER. But we all knew that already.

      Reply
    3. pgl

      this has yet to recover?????????

      It was 60.2% back when Trump was messing everything up. It is now 62.1%. Bruce Hall writes the DUMBEST THINGS EVER!

      Reply
      1. CoRev

        Ole Lil guy is lying again. “It was 60.2% back when Trump was messing everything up. It is now 62.1%. (Yet he claims) Bruce Hall writes the DUMBEST THINGS EVER!” Quoting the Covid low participation rate, which was largely caused by liberal/democratic state lock downs, is disingenuous. The Biden high post Covid recession is only ~62.4. https://fred.stlouisfed.org/series/CIVPART

        If he’s writing something he’s lying.

        Reply
        1. pgl

          Yes CoRev – household survey data is noisy. Have you not paid a bit of attention to the posts Dr. Chinn puts up? It appears not.

          Of course the metric to watch is the employment to population ratio which is up.

          I know you want to defend your fellow Village Idiot at every turn and I might say “nice try” but as usual you fell on your face. Go back to chasing your own tail.

          Reply

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