Business Cycle Indicators at the Beginning of February 2024

January NFP employment growth surprises on the upside (to say the least), at +353 vs. +187 consensus. On the back of monthly GDP and Q1 nowcasts, the economy seems to be continuing to grow apace.

Figure 1: Nonfarm Payroll employment incorporating benchmark revision (bold dark blue), implied level using Bloomberg consensus as of 2/1 and December 2023 NFP (blue +), civilian employment (orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP, 3rd release (blue bars), GDPNow for 2024Q1 as of 2/1 (lilac box), all log normalized to 2021M11=0. Source: BLS via FRED, BLS preliminary benchmark, Federal Reserve, BEA 2023Q3 2nd release incorporating comprehensive revisions, S&P Global Market Insights (nee Macroeconomic Advisers, IHS Markit) (2/1/2024 release), and author’s calculations.

6 thoughts on “Business Cycle Indicators at the Beginning of February 2024

  1. Macroduck

    China is working to cure its economic slump, but faces concern the effort isn’t enough:

    So, the lesson from Japan’s lost decade was to use monetary policy early and aggressively when an asset bubble bursts. The lesson from the Great Recession was to use fiscal policy early and agggressively when an asset bubble bursts, and to put politics aside. The concern is that China hasn’t learned any of these lessons. The emphasis at this week’s Politburo mertig was politics, not economics:

    Perhaps the U.S. situation gives Xi reason to doubt that good economic management is enough to secure his position. Output and employment growth, inflation back near target, scary episodes in the banking sector managed, but no reward in the polls for Biden. I certainly hope that’s not the lesson politicians are learning, but you know how they are.

    1. Ivan

      I did note in some of the comment to Kevin’s post a suggestion that some of those inexpensive EV’s are perhaps not just facing the tariff barrier but also may face problems being approved and then finding a market in US. But I hope someone will decide to take at least a few of them and get through the trouble. The other trade barrier we have with cars is a lot of technical requirements on order to be able to sell them here.

  2. Macroduck

    Calls for Democrats to find someone other than Biden to run for president seem to be dying down, though a number of wannabes are on various primary ballots. Weak poll numbers encourage primary and third-party challenges.

    Well, math is destiny, but weak poll numbers aren’t. Clinton, Obama and Reagan all overcame weak poll numbers to win second terms. Bush Sr., Carter and (non-incumbent) Gore all fell to primary or third-party challengers.

    So it’s either a lack of historical knowledge or simple political blood-lust that leads to the idea of running against a presidential incumbent from the inside of his own constituency. Even cartoonists know that:

  3. pgl

    I just watched Kudlow’s spin on the BLS report and I guessed it – Kudlow pulled a JohnH.

    Now Kudlow did admit the increase in jobs was impressive. He also correctly noted that real average hourly earnings rose over the past 3 months. But then Jonny boy’s text kicked in. What about the last 3 years? Kudlow claimed real earnings were lower today than they were when Biden took over.

    But of course I do not trust Kudlow or Jonny boy with the numbers so I checked. Nominal earnings rose by 15.44%. The personnel consumer expenditure price index rose by …. wait for it… 14.87%.

    So by Kudlow’s little time frame which I’m sure he got from little Jonny boy, real earnings ROSE. But of course Kudlow is paid by Faux News to lie to his viewers. Which little Jonny boy does here for free!

  4. Macroduck

    Oh, and Johnny? Looks like all of you mumbling may have accomplished nothing:

    “Biden holds a lead over Trump 50 – 44 percent among registered voters in a hypothetical general election matchup, according to a Quinnipiac…University national poll of registered voters released today.”

    Biden will resist Putin’s recreation of Tsarist glories, and Putin’s legacy will be to have impoverished his country while enriching himself, to have killed off or driven away the flower of Russan youth and to have mortgaged Russia’s future to Chuna. And you can say you helped!

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