Maybe. From Englander/Hewin at Standard Charter (gated):
The Q3-2022 B-D adjustment added 294,000 NFP jobs. This seems a little high to us, as the QCEW had not showed this many Q3 net job gains from openings less closings other than in 2020 during the initial recovery from COVID. Moreover, total private-sector job gains in Q3-2022 were 232,000 NSA, so the B-D adjustment accounted for more than 100% of private-sector NFP job gains. We note that for H2-2022 as a whole, the B-D adjustment represents 47% of the private-sector NFP job increase. Based on QCEW data, this would be an unusually high share. We cannot preclude that the H2 NFP data is correct, but we think it is – most likely – somewhat overstated. That would mean a decent downward benchmark revision in employment levels when benchmark revisions are implemented at the beginning of 2024.
As noted by other observers, including those at the Philadelphia Fed, and those who put substantial weight on the household survey, there seems to be evidence that the CES estimate of NFP is off. However, it is not clear that all alternative estimates indicate a slowdown in Q2.
Figure 1: Private nonfarm payroll employment from January 2023 CES release incorporating benchmark revisions (blue), ADP (sky blue), QCEW private covered workers, seasonally adjusted using log transformed Census X-13 (pink), Philadelphia Fed preliminary benchmark minus reported government employment (tan squares), all in 000’s, s.a.. Source: BLS (various) and ADP via FRED, BLS QCEW, Philadelphia Fed via FRED, and author’s calculations.
While both the QCEW series and Philadelphia Fed preliminary benchmark through September show a slowdown in Q2, the ADP (which relies upon a completely different data set, and not a survey) shows no slowdown. Since the QCEW is a census, not a survey, it typically has greater precision; however, it too is subject to revisions as new data comes in. So we’ll see on February 22.
In any case, even if a slowdown, I don’t think it would count as a recession in the NBER definition.
Q2 or Q3?
I’m waiting for co-author Rashad Ahmed to update us on the foreign yield curves’ “slant” on the U.S. economy (see what I did there??).
So, we’re looking for births minus deaths? This may come as a surprise, but we got data for that.
According to statistics released by the Administrative Office of the U.S. Courts, the September 2022 annual bankruptcy filings totaled 383,810, compared with 434,540 cases in the previous year.
https://www.uscourts.gov/news/2022/10/31/bankruptcy-filings-continue-fall
That’s Covid winding down. So the “death” side of the model should subtract many fewer jobs in the first 9 months of 2022 than 2021. Whether the decrease would be a record number isn’t something I need to speculate about.
On the “birth” side, we have new business applications. While applications have slowed since just after the end ofthe recession, they remain very high in comparison to the pre-Covid pace:
https://fred.stlouisfed.org/graph/?g=102dO
Evidence of rapid new business creation and reduced business closure is consistent with a high number of jobs being created which the establishment survey would not pick up. That’s what the birth/death model is for. So when the Standard Chartered guys say “the QCEW had not showed this many Q3 net job gains from openings less closings other than in 2020 during the initial recovery from COVID”, that sounds like a reasonable description of conditions in the first 9 months of 2022.
And since the data are available to check one’s intuitions about business births and deaths, perhaps the Standard Chartered guys should have done so, or told us if they did. Rookies.
By the way, the new business applications and bankrucies data don’t mean that the birth/death model addedthe right number of jobs. They domean that the model’s output is reasonable, given the available data. When data are available, one ought to examine it before drawing conclusions.
BNP had an interesting note on rate of job openings vs rate of hires, and went on to say that the disinflation would move at a glacial pace.
What with climate change, glaciers are friskier than they once were.
In the case of disinflation I’m hoping for the James Balog time lapse footage version.
I guess part-Jew Prigozhin doesn’t buy into the “never again” principal. Doubly fascinating based on Ukraine’s historic population of Jews and specifically Odessa. Zhvanets and Kherson also had a decent Jewish contingent in the past, I am sure many other Ukraine clusters of Jews I am missing. Probably not like Prague or Vienna were but, relatively big.
Nikki Haley realizes we have a climate change problem but her alleged solution is “carbon capture”?
https://www.msn.com/en-us/news/politics/nikki-haley-wants-to-address-climate-change-not-by-reducing-carbon-but-capturing-it/ar-AA17wjST?ocid=msedgdhp&pc=U531&cvid=5da747ffc5dc4125874b9557d728df56
At the same time, Haley has joined other Republicans in promoting efforts to capture harmful emissions from heavily polluting industries, rather than preventing those emissions from entering the atmosphere in the first place. Conservative environmental groups have applauded Haley’s willingness to discuss climate change, saying it could win over younger conservative voters, who polls show are more concerned about the issue than older generations. But liberal green groups have slammed her support for carbon-capture technology, calling it incompatible with warnings from leading scientists, who say the world must rapidly cut emissions to avert catastrophic warming.
I get that Haley is a fence sitting little coward who wants to pretend she is tough. But this idea is about as stupid as your typical CoRev rant.
Mildly curious who her “economic advisors” or “economic team” is, but not curious enough to try and look it up. Should be good for chuckles sometime down the road. She’s a complete lightweight, similar to Copmala Harris.
There are some gems in this article. I was tempted to copy/paste them but I’ll let those who care to read it find them on their own. I’ll just say Nikki Haley has zero ability to give adult level questions adult level answers.
https://www.politico.com/interactives/2021/magazine-nikki-haleys-choice/
As regards donald trump, Nikki Haley thinks Daddy violently hit Mommy because Mommy wasn’t nice to Daddy, and so it’s Mommy’s fault Daddy bruised Mommy’s face and left Nikki and Mommy. The answers and thinking of a 10 year old girl.
That interview shows how she could never stand up to Trump – the bully of them all. Her ad that she stands up to bullies is all hype and no substance.
Here’s a real gem coming from the daughter of Asian Indian immigrants to America:
HALEY ON THE CONFEDERATE FLAG
“I lived my life trying not to judge people because I know what it’s like to be judged. So, if you want me to go say that certain people are bad, I’m not going to do it. Because there are some of my friends who still do respect the Confederate flag. And there are some of my friends who think it’s a horrible thing. I’m not going to pick any of those friends over the others.”
I’m eager to hear her explain that quote in a nationally televised debate. But it does explain her 2023 fealty to donald trump.
Even Newt Gingrich wanted the Confederate flag gone but not Nikki leightweight.
After typing I wouldn’t quote some of these gems, it seems I can’t resist. I must have skipped at least 5 gems, here’s another one, which captures Nikki Haley’s personality accurately:
“Friends of Haley say she was genuinely surprised, upon joining the administration and immersing herself in the realm of geopolitics, at how often her instincts aligned with Trump’s. (‘On his policy, I agree with everything that he’s done,’ she told me in one interview, an assertion she walked back only slightly when I mentioned deliberate family separation at the southern border.) Perhaps this owes to some shared traits: reflexive distrust of strangers, personal and political insecurity, a patronage approach to relationships.”
I guess thousands of immigrant children being ripped away from their parents, and literally caged is an easy political issue to forget, when both your parents are Asian immigrants to America. Why would Haley remember trump separating immigrant children from their parents at the southern border?? I mean Copmala Harris (the poor sobbing girl, with upper middle class parents, on the public school bus, oh heavens!!!) forgot she had never even visited the border during her campaign. So why would we expect Nikki Haley to remember those immigrant children torn away from their parents by donald trump?? Haley got her UN ambassador job, so the important criteria, Nikki Haley being taken care of by trump had been satisfied.
https://thehill.com/homenews/campaign/3722641-nikki-haley-says-warnock-should-be-deported-at-walker-rally/
You can see how easily she tacks her sails, when the wind changes.
https://twitter.com/NikkiHaley/status/1588601621633814529/photo/1
https://images.app.goo.gl/Gc2zHbHXaA4gpKe86
It’s curious to me, to put it very mildly, how women can support a candidate, who not only has zero respect for women, but a pure malice towards them. How does a gender gain respect, when they affiliate themselves with those who have the absolute lowest regard for them as a whole?? That one question is very curious to me and an ongoing (i have a feeling lasting an entire adult lifetime) personal wonderment for me. The subtext women send seems to be…… well I’m not going to say it, as stating truths is now seen as extreme.
But a large number of women will vote for Haley, the same as they did trump, and the same as they did Herschel. You can bet your last nickel on it.
““Legal immigrants are more patriotic than the leftists these days,” Haley said at the Hiram, Ga., rally. “They worked to come into America and they love America. They want the laws followed in America. So the only person we need to make sure we deport is Warnock.”
I wonder if this fake American would have deported MLK. Warnock is more of an American than this Trump toadie could ever even imagine.
You know I grew up in Atlanta and have visited that pit called South Carolina a few times. There is a reason the 1996 Olympics came to Atlanta. First of all we welcomed people of all colors and religions to our city. And the blacks she attempts to demean with this racist trash worked very hard to get my city ready to greet the world. Haley’s state could have never pulled that off under his “leadership”.
“But a large number of women will vote for Haley, the same as they did trump, and the same as they did Herschel.”
When I see pictures of Haley and Walker together, why do I suspect Herschel tried to get her in bed. She indeed is one sick puppy.
I mean seriously, Haley looks happy as a lark, doesn’t she?? You don’t need to have majored in psychology to know the woman is needy for social recognition from those pics do you?? “Look everybody!!!! I’m with a guy who paid money to kill his own children!!! This is my Olympics podium!!!” Wow, into Fruitcake City much??
I couldn’t find any names but this discusses her dismal record as governor of South Carolina:
https://aflcio.org/press/releases/sc-gov-nikki-haleys-real-economic-record-corporate-subsidies-over-public-good
@ pgl
I did some deep deep investigative journalism (you know me) and I think I may have found the first brain communion of Nikki Haley’s economic team. The one in the center “passed away” after this photo was taken, but the man just to his right (our left) is a renowned demand side and “wages caused” inflation expert on Bloomberg and Brad DeLong says he’s “a hell of a guy”:
https://cms.zerohedge.com/s3/files/inline-images/the%20boys_0.PNG?itok=FZmjyp-c
I’m not sure if Brad DeLong ever read this short bio on Larry Summers. But I am sure hard-hitting journalist David Westin would never gloss over such history just to ameliorate Larry Summers’ ego. No, Westin would never do that. I’m sure Westin has asked Larry Summers multiple questions about his relationship with Jeffrey Epstein. But there’s “wages created” inflation that Westin is focused on right now.
https://www.huffpost.com/entry/joe-biden-larry-summers-epstein-financial-crisis_n_5ea33dc8c5b669fd89249e44
https://www.msn.com/en-us/sports/nba/msnbc-s-andrea-mitchell-presses-john-bolton-on-describing-nikki-haley-as-light-as-a-feather-would-you-be-saying-that-about-a-man/ar-AA17wPRc?ocid=msedgdhp&pc=U531&cvid=306db32716624973b38b93bb2d79121c
“Nikki Haley is no Jeanne Kirkpatrick” – John Bolton. Of course Bolton was not on par with Kirkpatrick either.
One of the few Okies to get national recognition/respect. Carl Albert and a small handful of others. I strongly disliked her politics, but one things you could never label Kirkpatrick is a “lightweight”. Razor sharp mind. If we had a left version of her I would vote for her for President.
https://en.wikipedia.org/wiki/Jeane_Kirkpatrick
Reality is, her type comes along like once every 25 years–if that even. If you could subtract a generation off her years Kirkpatrick would have made a better choice as McCain’s VP, and wouldn’t have cost McCain the election by incessantly running off at the mouth.
@ pgl
Hey, last of the loyal Kelly Conway fans (did my evil attempt to make you projectile vomit succeed??).
Did you notice who Kelly Conway has “thrown her lot in with” (can I use antiquated British English phrases to give myself a false sense of sophistication??) here recently??
She’s advising Mike Pence now, which if not stated openly, to my way of thinking signals a breakaway from donald trump.
The Trump mob can bully the likes of Nikki Haley but they are not getting far with this act in our courts:
https://www.msn.com/en-us/news/crime/fox-news-loses-appeal-of-smartmatic-defamation-suit-claims-against-rudy-giuliani-and-jeanine-pirro-revived/ar-AA17wuJ9?ocid=msedgdhp&pc=U531&cvid=a8965900ae3e4b9d9eaf1bff24a6f426
Fox News lost its appeal of Smartmatic’s $2.7 billion lawsuit for broadcasting conspiracy theories about voting machines in the 2020 presidential election. An intermediate appellate court in New York also revived claims against former New York City Mayor Rudy Giuliani and Fox personality Jeanine Pirro. A five-judge panel unanimously found that Smartmatic adequately alleged that Fox News, Giuliani, Pirro and Maria Bartiromo either knew that the voting machine conspiracy theories were false — or had serious doubts about their veracity — when they aired. Under the actual malice standard, it isn’t defamation if the network, its hosts, and its guest “merely report the newsworthy fact that the President’s campaign lawyers were recklessly making statements conveying false information,” the ruling notes. But that isn’t what Fox News and its co-defendants are accused of doing. “Rather, the complaint alleges in detailed fashion that in their coverage and commentary, Fox News, Dobbs, and Bartiromo effectively endorsed and participated in the statements with reckless disregard for, or serious doubts about, whether the assertions or implications that plaintiffs had participated in election fraud had any basis in truth or were supported by any reliable evidence,” the ruling states.
0
I need to moan about the Fed…
The “soft landing” notion seems to be gaining ground. Here’s an example:
https://twitter.com/RenMacLLC/status/1624789840687497217?cxt=HHwWgoC8jY3wtIwtAAAA
Meanwhile, the most reliable leading indicator of recession is just off its most recessionary reading ever:
https://fred.stlouisfed.org/series/T10Y3M
Maybe we are seeing the end of an era for the curve. Maybe we’re seeing fresh evidence that recession forecasting is a mug’s game, that “the most anticipated recession ever” will only arrive after we’ve decided it won’t.
One big factor in determining recession odds is the Fed’s determination to raise the jobless rate. The December SEP showed FOMC members anticipating a rise in the jobless rate of 0.9% between 2022 and 2023. With the 3-month average jobless rate now at 3.6%, make that a full 1% rise. A rasise that large never happenend without a recession. The Sahm rule says only a 0.5% rise is needed to confirm that a recession is underway and the Sahm rule has a perfect record.
Of course, the job loss associated with a 1% rise in the jobless rate is pretty damaging itself, regardless of what NBER decides about the recession call.
The Fed’s dual mandate calls for price stability and maximum employment. The Fed has a clear definition of price stability, but none for maximum employment. Before the Covid recession, the Fed adopted a new definition of price stability which involves averaging inflation over time instead of just arriving at the 2% target. The context for that decision was a long period of zero nominal rates which failed to raise inflation to target. The new operational definition was a promise to make up for misses. That definition could partly explain the Fed’s apparent current determination to maintain contractionary monetary policy after inflation has returned to target – match inflation overshoot with a period of undershoot. That would, however, ignore the lessons of Japan’s long period of low inflation and the developed world’s somewhat shorter period of low inflation. Inflation undershoot is really bad.
Fed officials are not, however, saying that they are employing their new policy model. They are instead sayng that the jobless rate is too low and must be raised, period. That has two implications. One is that the new inflation targeting system has been either abandoned or turned into an unjustified “secret” version of itsself. The motivation for the new definition of price stability was that it would improve communication. By telling the public that a 2% average over time is the Fed’s target, inflation expectations could be managed so as to strengthen the Fed’s ability to hit its target. The Fed is no longer justifying its actions to the public by talking about average inflation over time, so if the target remains a 2% average overtime, nobody is telling us.
The other implication is that the employment mandate is subordinate to the price-stability mandate. The Greenspan-era argument was that price stability created the environment for maximum average employment over time. That was not an overt admission of subordination, but reading between the lines was easy enough. Powell’s Fed is also pretty clearly subordinating the employment mandate to the price stability mandate.
The problem is, Powell’s Fed is being incoherent about it. The newly-adopted system of policy operation? Abandoned. Forward-looking policy? Not really, not founded in economic leads and lags. The Phillips curve appears to be the basis for policy, but the evidence from the crude Phillips curve since the early 1990s is that wage pass-through is extremely muted – no need to worry about a tight labor market. If we’d rather use an expectations-based Phillips curve, we’d need to face up to expectations, which are for a future of low inflation. So the Fed is apparently relying on some sort of made-up, personal-bogey-man version of the Phillips curve which ignores evidence. Or is aiming at a period of inflation undershoot, but keeping it a secret.
And Brainard is leaving.
“Brainard has argued against ascribing too much importance to rising wages as a source of inflation, countering one argument used in favor of potentially higher interest rates. She has pointed to high business profit margins as an inflation source that could fall fast – an issue Fed Chair Jerome Powell has tended to avoid – and emphasized other ways rising prices might be tamed without a serious impact on employment.”
……..
“Losing Brainard … at this moment means some loss of dovish influence on near-term policy making. It also changes the tone of the ‘Fedspeak’ markets will be hearing given the role Brainard often played in sketching out the dovish views on the (Federal Open Market Committee),” said Peter Williams, director of global policy strategy at Evercore ISI. “Even if the replacement is a perfect match, it will take time for him/her to gain similar influence.”
https://www.reuters.com/world/us/brainards-departure-white-house-would-come-critical-juncture-fed-2023-02-14/
Any kind of U.S. recession 2023 falls at Powell’s feet, no one else’s.