Business Cycle Indicators as of Mid-January 2023

With the release of December 2022 industrial production (-0.7% vs. -0.1 Bloomberg consensus, m/m), we have the following picture of business cycle indicators followed by the NBER Business Cycle Dating Committee, along with IHS Markit monthly GDP:

Figure 1: Nonfarm payroll employment, NFP (dark blue), Bloomberg consensus as of 1/18 (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), GDP (blue bars), all log normalized to 2021M11=0. Q3 Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (1/3/2023 release), Bloomberg (as of 1/18) and author’s calculations.

The decline in industrial production was a big negative surprise. Taking this report, and others, into account, Atlanta Fed downgraded its nowcast for Q4, from 4.1% q/q SAAR to 3.5%.

Figure 2: GDP (black), WSJ mean January 2023 survey (blue), October 2022 (chartreuse), GDPNow 1/18/23 (red square). Source: BEA 2022Q3 3rd rel, WSJ (various), Atlanta Fed

Hence, despite the large drop in industrial production (recall NBER BCDC places primary weight on nonfarm payroll employment and personal income ex-transfers), Atlanta Fed’s count still says positive GDP growth for Q4.





21 thoughts on “Business Cycle Indicators as of Mid-January 2023

  1. Moses Herzog

    I saw the “G word” (think English fairy tales here) used in one of the banker notes. Not seeing it, based on Powell’s track record. Minus the Fed’s inertia/culture, the odds (in my own mind) increase dramatically.

    1. JohnH

      The first line of text on the Wage Growth Tracker: “The Atlanta Fed’s Wage Growth Tracker is a measure of the NOMINAL wage growth of individuals.”

      I guess the Atlanta folks will just let people apply their own deflators and then argue about what it all means. (And while they’re arguing, they can denigrate each other to their heart’s content!)

      Fortunately, BLS data shows that REAL earnings are actually rising again.

  2. JohnH

    Median usual weekly real earnings rose 0.8% from $361 to $364 in 4Q2022. With inflation declining, real earnings are rising again!

    But before we start singing “Happy Days are Here Again,” we should all remember that real median earnings are only $1 (0.275%) above what they were in 4Q2019.

    BTW–“Happy Days are Here Again” was the campaign song for Franklin D. Roosevelt’s 1932 presidential campaign. It is the unofficial anthem of Roosevelt’s Democratic Party.

    1. pgl

      “With inflation declining, real earnings are rising again!”

      Ah yes – the return of praising Cameron for fiscal austerity. Excuse me troll – but your mother does not need a reminder of how dumb her son is.

      1. JohnH

        pgl really does take the Grand Prize for ridiculous comments. How does Cameron have anything to do with real wages increasing as inflation declines, a phenomenon that recurs regularly…and has absolutely nothing to do with Cameron?

        I’ve been asking this question for years…and for some reason pgl, instead of addressing what’s happening, always tries to divert the conversation to Cameron.

        Cameron is alive and well and living in pgl’s addled brain.

        1. pgl

          I was only reminding people of all those ridiculous comments you made over at Mark Thoma’s place. Or course you tried to deny these comments for a while but then there was the post from our host that utterly mocked your BS. Come on Jonny boy – own up to your continuing stupidity.

        2. pgl

          “a phenomenon that recurs regularly”

          Hey – once in a while the dice turns up double sixes too. That does not mean it is a phenomenon that recurs regularly.

          Jonny boy – please do not pretend you are some great economic historian. No – you are just a retarded monkey banging away on the keyboard hoping to get your little Nobel Prize.

  3. pgl

    The Producer Price Index for final demand declined 0.5 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.2 percent in November and 0.4 percent in October. (See table A.) On an unadjusted basis, the index for final demand increased 6.2 percent in 2022 after rising 10.0 percent in 2021. In December, the decrease in the final demand index can be attributed to a 1.6-percent decline in prices for final demand goods. In contrast, the index for final demand services rose 0.1 percent.

    Wait – PPI over the past 3 months has risen by a mere 0.1%? Could someone call the Federal Reserve and suggest they start lowering interest rates?

  4. Moses Herzog

    The American writer Russell Banks died very recently. It’s a great loss to American literature. I was first turned on (made aware) to Russell Banks back in 1997 when I was a semi-truck driver stuck on a “layover” in Cedar Rapids Iowa and walked down to the local movie theater, to find this incredible incredible film, based on a Russell Banks story:

    YES the book is better than the film. It’s as “Americana” as “Americana” gets.

  5. JohnH

    It’s interesting how the media is playing the helicopter crash in Ukraine: “Three of Ukraine’s top officials were among those killed in a deadly helicopter crash near the capital Kyiv on Wednesday morning….Denys Monastyrsky, Ukraine’s Interior Minister, his deputy minister Yevheniy Yenin and state secretary Yurii Lubkovich, were on board a helicopter belonging to the State Emergency Service of Ukraine (SES)…Ukrainian officials said that [the dead] included six ministry officials.”

    So what is the portfolio of the Interior Ministry…national parks? Not exactly. According to one source, “someone (or a group of someones) assassinated Ukraine’s top three intelligence officials.” If this is correct, it was effectively a decapitation of the intelligence ministry, or maybe one of the intelligence ministries.

    Was this spelled out anywhere in the mainstream media? My guess is that is was not spelled out, because, like the fall of Soledar, it might undermine the narrative that Ukraine is either winning or can still win. (who knows? maybe they can.)

    Kramer, over at AngryBear, has a piece on the difficulties entailed in managing the narrative. “If the goal of your communication is to keep public support for Ukraine strong, optimism is the order of the day. … [but] optimism about the prospects of a Ukrainian victory may encourage the White House and others in the foreign policy establishment to be cautious in supplying Ukraine with the additional weapons it needs to secure a timely victory. It may even give Russia a chance to regain its footing and to turn the war into a bloody stalemate that eventually ends in substantial territorial gains for Russia.”

    In short, the right message to send to the administration is not a message of unqualified optimism. Instead, it should emphasize (in addition to the moral and strategic importance of a clear and fast Ukrainian victory) the risk that delay in sending aid will lead to stalemate, demoralization, and defeat.”

    Bottom line: the narrative has to be carefully calibrated and targeted to downplay the inherent contradictions. And information that undermines the narrative is definitely verboten!

    I must say that the narrative managers are doing a much better job than they did in Iraq. If they had really done their job, we’d still be there, everyone convinced that we were winning. It seems like the narrative managers honed their PR skills in Afghanistan and are now back at least to the level of performance we saw in Vietnam…before it all unraveled.

    1. pgl

      Back to your day job of promoting Putin’s war crimes. How is he paying Jonny boy – picture of old ladies in Ukraine being raped by Russian soldiers I presume. Not only do you have zero integrity, no intelligence, no caring for the average American household, but absolutely no soul. Yes Jonny boy is even more disgusting than Stalin, Hitler or even Trump.

      1. JohnH

        More commentary from pgl’s addled brain. Commenting on the media narrative, which is very selective in what’s being reported, has nothing to do with Putin. But Putin is obviously alive and well and occupying pgl’s brain!

    2. pgl

      I have not ventured over to Angrybear for a while so this post and the comments from the usual Putin apologists was extremely disappointed to read. But Daniel Becker had a good comment noting how you disgusting Putin poodles are trying to defend Tucker Carlson. Now when one is defending someone that vile – one should check to see if one even has a soul. Jonny boy certainly does not.

      As far as the politics, if helping Ukraine makes Biden a one term President, I suspect he can live with that. After all – some people see principle is being more important than getting a 2nd term. Something a soulless troll like Jonny boy could never get.

      1. JohnH

        It does make you wonder why the Biden classified document kerfuffle came out now. Is somebody trying to get rid of him? Or are we to assume that these scandals just sit and molder until someone happens to discover them and the mainstream media magically happens to see fit to make them newsworthy, when so many other major stories, like the fall of Soledar, are barely fit to print.

        Yves Smith has a great post on this: “What if Russia Won the Ukraine War but the Western Press Didn’t Notice?” The first sentence: “The level of creative story-telling about Russia’s progress in the Ukraine War has reached the point where the scenario below is not entirely impossible.”

        What surprises me most is that pgl and many other commentators haven’t blamed Biden’s travails all on Putin! Maybe he learned something from Hillary’s fiasco after all.

        What also surprises me is that pgl doesn’t recognize the critical principle that “An Informed Citizenry is the Bulwark of a Democracy.” (Thomas Jefferson) But, hey, according to pgl and his ilk, defeating Russia if far more important than preserving democracy. Orwell would certainly understand. As for Jefferson, he is probably rolling is his grave.


    Industrial production numbers are a wrong anyway you go about it. Lack of days and inventory moving made the month a lie. But what else is new. December has been becoming a nonwork month for years. It’s numbers are half created which throws thing into January. Bloomberg should really know this as its not 2007 anymore.

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