Despite the lack of coincident indicators suggesting a recession’s onset (we’ll see more on Friday), there are plenty of articles now suggesting an imminent recession: “Wall Street Banks Say Markets Are Flashing Rising Recession Risk”, “The Recession Trade Is Back on Wall Street”, “Whisper it and it’s back: Recession risk creeps onto markets’ radar”, “2025 Recession Risk Is Increasing According To Multiple Indicators”. Kalshi’s recession probability for 2025 is now at 42%, after languishing at around 22% for a month. Assuming no recession as of February, what does a conventional term spread (10yr-3mo) model for 12 months ahead indicate?
Author Archives: Menzie Chinn
ADP Private NFP Growth Underwhelms
+77K vs. +141K (Bloomberg consensus). Using the 2021M07-2025M01 relationship between ADP and BLS measures (in log first differences), I nowcast +125 vs Bloomberg +108K (although the 95% prediction interval encompasses a drop to 135310K from January’s 135479K).
Macro Lecture Notes on Mass Deportation/Immigration Restriction
From Econ442, yesterday’s lecture:
The Outlook for Grocery Prices and Eggs (pre-tariff)
So much for grocery prices dropping on day one. Some forecasts from ERS, TradingEconomics:
(Would’a Been) Biggest Tax Increase Ever!
Update to this post.
Trump’s Economic Team and Tariff-fest 2025
Years (or months) from now, if the economy goes into recession, remember this is the team that brought you that outcome.
Browbeating Trump’s Bete Noire into Submission via Trade War
Trump can’t even do that right.
GDPNow Assuming No Import Effects: Still Close to Stall Speed
Assume no revision to GDP prospects from the imports data, as Goldman Sachs did. What is the path of GDP growth, and the level of GDP?
EPU on the Rise
EPU through 3/3/2025:
Soybeans (Again!)
Deja vu all over again – China retaliates, and again soybeans are on the list.