Here’s a picture of some key indicators followed by the NBER BCDC, along with monthly GDP:
Figure 1: Nonfarm Payroll (NFP) employment from CES (bold 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 (blue bars), all log normalized to 2023M04=0. Source: BLS via FRED, Federal Reserve, BEA 2024Q2 advance release, S&P Global Market Insights (nee Macroeconomic Advisers, IHS Markit) (8/1/2024 release), and author’s calculations.
With positive (albeit slower) employment growth, it’s hard to believe that a recession began in July, even taking into consideration the fact that the Sahm rule indicator has breached the 0.50 threshold (at 0.50 ppts). When calculations are taken to three significant digits (two decimal places), the indicator using current data is reading 0.49 ppts.
NFP is the first monthly reading we have for July. The Lewis/Mertens/Stock NY Fed WEI is reading 1.95% for data released through week ending 7/27. The corresponding Baumeister/Leiva-Leon/Sims WECI is reading 0.15, which means — if trend growth is 2% — a growth rate of 2.15%.
Off topic – climate adaptation:
Economists at the San Francisco Fed have taken a look at U.S. internal migration patterns to see if there is any sign of adaptation to higher temperatures. There is:
https://www.frbsf.org/research-and-insights/publications/working-papers/2024/07/snow-belt-to-sun-belt-migration-end-of-an-era/
Especially among age groups likely to be making long-term location choices (ages 20-29 and 60-69) and among the college-educated, there is evidence of a shift away from migration toward the sun belt.
This is good news. Using resources to house and employ people today, simply to have those resources abandoned later, is something we can’t afford.
Who decided to put all those new microchip plants in Arizona?
Turns out, Bob Menendez isn’t the only big-name politician to take money from Egypt:
https://talkingpointsmemo.com/morning-memo/trump-doj-allegedly-stymied-probe-into-whether-he-took-egyptian-cash-wapo-reports
Trump’s DOJ knew about it, butdecided tokeep it quiet. Ten million, in case you were curious.
“Trump’s DOJ knew about it, but decided to keep it quiet.”
Bill Barr on the job!
JD Vance falsely claims Trump ‘never said there were very good people on both sides’
https://www.msn.com/en-us/news/politics/jd-vance-falsely-claims-trump-never-said-there-were-very-good-people-on-both-sides/ar-AA1o9y66?ocid=msedgdhp&pc=U531&cvid=2810f067a1a3402ab28fc72f70a42e79&ei=20
Oh Lord. Just deny, deny, deny and hope the sheep are too stupid not to remember Trump’s racist past. Or is J D so incredibly dumb that he believes the trash he is spewing. With this clown it is hard to tell whether he is lying or he is the dumbest person on the planet.
This is one of the most egregious lies told about Trump and you should be ashamed for amplifying it. Here is what Trump said:
“Excuse me, they didn’t put themselves down as neo-Nazis, and you had some very bad people in that group. But you also had people that were very fine people on both sides. You had people in that group – excuse me, excuse me. I saw the same pictures as you did. You had people in that group that were there to protest the taking down, of to them, a very, very important statue and the renaming of a park from Robert E. Lee to another name.”
Brutus: The essential line: “But you also had people that were very fine people on both sides.”
Right. Trump was saying essentially that most of the people protesting taking down the Robert E. Lee statue were as well-intentioned, which was true. The journalists who purposely twisted this paragraph know that. It is disgustingly dishonest. There is plenty to criticize the braggadocios Trump without resorting to lies.
Brutus: If you are protesting taking down statues of traitors to the Union, I think you are *not* one the fine people. Color me an anti-insurrectionist.
Traitors to the Union? They were seeking an amicable divorce in the same manner they joined the Union initially. They were seceding just as the 13 colonies seceded from Britain. Robert E. Lee was a particularly honorable man. They weren’t trying to hurt the union, only quit it through the same democratic method by which they joined. The non-Deep South States such as Lee’s Virginia only seceded when Lincoln demanded of them troops to invade the Deep South.
Brutus: Amicable divorce with shelling of Fort Sumter? Seriously, you’re delusional. Next you’ll tell us it was all economics that drove the Confederacy.
Trump Media & Technology Group Begins TV Streaming Rollout
https://finance.yahoo.com/news/trump-media-technology-group-begins-123400809.html
Wow – one would think something like this would raise the stock price but it seems that price is still below $30 a share. Yea – the market sees this company as a real dog lead by a felon who is never going to regain the White House.
https://www.youtube.com/watch?v=Hz9Z7A2UA68
The Olympics do not start until Track and Field begins which was today. This clip is only 7 minutes but I would love to see the entire race as it was an Olympic record for the 10,000 meters in just over 26 minutes and 43 seconds. And the finish was electric with Grant Fisher of the USA surging for a bronz. Americans almost never medal at this distance but he pulled it off!
https://www.youtube.com/watch?v=Hz9Z7A2UA68
The stupidest man in the world strikes again
So who does Kevin Drum call the stupidest man in the world. OK – too easy as it is Stephen Moore. But read the post anyway as it is a take down on Donald Trump’s dishonest and right wing Social Security proposals. MAGA?!
It’s a classic con game – butt not that smart. He promise the old people a payout to get their votes (as he promises any and all other groups whatever they want).
There are already big breaks in taxes on social security, even the richest of the rich recipients only get taxed on 85% of their social security. If you are low income none of your social security is taxable income. The additional break proposed by Trump will mostly go to people who are already doing pretty well. I am sure that President Biden will ask why someone like him who has plenty of money should be given a tax brake.
There are plenty of people who need a tax brake, including some on social security, but the brakes should be targeted to those in need.
The king of bankruptcy is proposing another unfunded brake in taxes for millionaires. But I guess Mexico will pay for it.
https://jabberwocking.com/the-stupidest-man-in-the-world-strikes-again/
OK I was multi tasking yesterday. Link to Kevin Drum post.
As usual for Republicans, this would be a regressive tax cut. The higher your income the bigger the tax cut. Lower income people already do not pay this tax so would benefit them not at all.
And by law, the proceeds of the current Social Security benefit taxation are deposited directly into the Social Security and Medicare trust funds. Eliminating this tax reduces the solvency of those programs. So their other plan is to increase the retirement age to reduce benefits, which again mostly affects lower income people.
Anyway, this is never going to happen. It is just as much a Trump lie as his promise to replace Obamacare or his infrastructure plan. It’s all a Trump fantasy.
You forgot the classic Trump lie promise. Build a wall and have Mexico pay for it (he build less than 5% of it and used US military budget money.
Claudia Sahm has not yet posted to her blog about today’s employment report. She has, however, written recently about the Sahm rule:
https://stayathomemacro.substack.com/p/sahm-thing-more-on-the-sahm-rule
Among several points she makes, there is one which I particularly like. It is that a gradually rising unemployment rate is common just prior to recession, as demonstrated in this graph:
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F53798a06-f128-47e9-aa73-6f0115fd4f1c_747x641.png
I particularly like this point because I’ve made the same point myself – the jobless rate makes a reasonably good short-term leading indicator of recession.
The Fed should already have cut rates.
Off topic – the Senate majority:
Real Clear Politics currently shows 7 senate races as toss-ups. Democrats have to win all of them to win a Senate majority without an assist from the VP.
RCP has a “no toss-ups” Senate map which assigns a win to whichever candidate is polling best, no matter how small the margin or how thin the polling. The result there is Republicans winning a 51-seat majority – that means Democrats are leading in all but two toss-up states. Democrats only need to improve that number by one seat in order to control the Senate with VP help.
RCP has John Tester of Montana loosing his seat, after holding it for the past 18 years. That’s where I’d put my money.