Aggregate consumption drops as income ex-current transfers rises. The pattern of disaggregated consumption pattern suggests tariff-induced front-loading drove some of the support for consumption in December.
Monthly Archives: March 2025
James Hamilton: “Are consumer sentiment studies a good measure of the economy?”
Jim Hamilton (with others) answers the question in the San Diego Union-Tribune:
Bordo-Siklos Central Bank Credibility, using Michigan Expectations
Using final March numbers:
Term Spreads, Yield Curves, 28 March 2025
Why 2025 is not 2022 (Short-Horizon Recession Forecasting-Wise)
Reader Bruce Hall comments on this post showing the implications of a short horizon probit model of recession likelihood.
Trump: “I couldn’t care less if [foreign automakers] raise prices because people are going to start buying American cars.”
Near Horizon Recession Probability
I run a probit regression of a NBER peak-to-trough recession dummy on contemporaneous Michigan sentiment (FRED variable UMCSENT, and final reading for March) and the 1yr-Fed funds spread (the last is per Miller (2019) who shows this spread has he highest AUROC of spreads at one month horizon).
Business Cycle Indicators for February: What Does It Mean When Consumption Falls while Income Rises?
Personal income growth at +0.8% m/m vs +0.4% Bloomberg consensus, while consumption growth is +0.4% m/m vs 0.5% consensus. GDPNow adjusted for gold imports now at -0.5% q/q annualized. Michigan final expectations for March down 52.6 vs 54.2 consensus.
More on the Mar-o-Lago Accord Malarky: “be afraid…be very afraid”
From Steve Kamin, two pieces: [1] [2]. A succinct summary:
So all told, Miran’s suggested options to lower the dollar while containing interest rates would be ineffectual, destabilizing, and ultimately for no good purpose. In his conclusion, he acknowledges some of these risks, but argues that because of Trump’s focus on financial markets, “I therefore expect that policy will proceed in a gradual way that attempts to minimize any unwanted market consequences…” Well, if the past few weeks of trade policy are any indication, be afraid . . . be very afraid!
2024Q4 GDP, GDO, GDP+, and Nowcasted Consumption Crash
Third release on GDP. We now have a reading on GDO, as well as an updated view on GDP+.