Trend shifted down, but sensitivity up.
Figure 1: Log of ratio of vehicle miles traveled to monthly GDP (000’s miles divided by bn.Ch.2017$ SAAR) (blue), and 2000-19 stochastic trend (red). NBER defined peak-to-trough recession dates shaded gray. Source: NHTSA via FRED, SPGMI, NBER, and author’s calculations.
Nonoverlapping log differenced q/q monthly GDP regression on log differenced VMT has a adj-R2 of 0.03 pre-pandemic, and 0.31 post pandemic (coefficient rises from 0.14 to 0.23).
Given the structural break, it’s unclear how reliable VMT is a leading or contemporaneous indicator of recession (historically, VMT, gasoline consumption, and petroleum consumption all predicted the recession of 2022H1).
Off topic – Financial implications of France’s political and budget troubles:
https://www.worldgovernmentbonds.com/spread/france-10-years-vs-germany-10-years/#title-historical
The French/German ten-year spread is now at 85 basis points, up 9 bp in the last month and the widest in roughly 12 years. Barnier’s parliamentary coalition faces a confidence vote over budget issues. Scholz coalition also faces a confidence vote in January over a budget spat. One big difference is that Germany’s deficit is under 3% of GDP, while the French deficit is well over 6%.
The ECB has raised the possibility if a financial crisis within the EMU:
https://www.ecb.europa.eu/press/financial-stability-publications/fsr/html/ecb.fsr202411~dd60fc02c3.en.html#toc5
The entire document is enlightening, but check Chart 1.3 for the short version.
There is talk of the ECB’S Transmission Protection Instrument being used to shore up French debt in case of crisis:
https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220721~973e6e7273.en.html
Despite Germany’s lesser budget woes, the Treasury/Bund 10-year spread is at its widest since April – narrowing for the Bund.
The French 5 year CDS spread is now 36.4, near the highest since early Covid days, vs 12 5 for Germany.
The global picture is a bit dicey these days. Oh, have I mentioned South Korea…?
Yoon is best thing that has happened to Kim Jung Un this decade! 20% approval rating, won the last election i 2022 by 1% and he wants martial law. Seems the presidential -military coup ends at 04:30 Seoul time.
Over the weekend NATO member Turkiye looses ISIS-light terrorists on Aleppo, Syria!
US urgently sending another $750 million in military supplies to Kiev!
With friends like US has…….
Win friends like these, our enemies are still worse.
russia is using civilians in Ukraine as target practice for its drones. over 9000 attacks in Kherson, unprovoked, on civilians going about daily activities. you want to defend Russia and putin here, anonymous? staying silent means you know putin is a murderer, anonymous.