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).
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.
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!
Third release on GDP. We now have a reading on GDO, as well as an updated view on GDP+.
From Atlanta Fed today:
Conference Board confidence index at 92.9 vs. 94.2 consensus. Here’s confidence vs. U.Mich sentiment (all standardized).
As attributed to Paul Samuelson. So, with trepidation, I show the SP500 and CAPE over the last half decade:
EJ Antoni concludes we’re in a recession, and elsewhere, have been since 2022. On the other hand, he argues (rightly) that we shouldn’t take a face value GDPNow’s reading for Q1.
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version, was published by Project Syndicate.