Apologies to Laurence Olivier in “Marathon Man”. Derek Thomson of the Atlantic describes “How the Recession Doomers Got the U.S. Economy so Wrong”. Personally, I don’t think we should take the recession scenario off the table, despite the recent spate of good data. First, term spread models implied a downturn/recession in the 4th quarter of 2023 (using a 50% threshold), and we’re still in the 3rd quarter. Second, these data are going to be revised — and GDP in particular will be heavily revised.
Author Archives: Menzie Chinn
Whose Side Are You Rooting For?
A reader writes:
It’s a stealth counteroffensive! Nothing in the US media…a sea change from the heretofore triumphalist “Ukraine is Winning” narrative.
But there is plenty in the Russian media: “Ukraine suffers heavy losses in failed offensive – Moscow”
https://www.rt.com/news/561971-ukraine-offensive-casualties-report/Gotta keep sifting and winnowing to find the truth…
Inflation Breakevens and Expected Inflation: 5, 10, 30 Year Horizons
Beware the risk and liquidity premia, when inferring inflation expectations from breakevens.
Business Cycle Indicators, at the Beginning of August
Consensus July employment growth at 200K, June GDPNow rises 0.5% m/m, and GDPNow at 3.9% q/q AR.
The Sensitivity of Economic Sentiment to Partisan Affiliation
One of the puzzles of current times is why overall assessments of the economy have not risen in accord with actual developments (say, as summarized by the Misery Index), and relatedly why those gains have not redounded to the incumbent president’s approval ratings (discussion here). I don’t have answers, but I have some observations.
Private NFP in July
ADP surprises (again) on the upside (324K vs. 189K Bloomberg consensus). I’m not sure we should take too much from that development.
A Wisconsin Senator in the Conspiracy
Specifically, Senator Ron Johnson’s role:
Defense Spending over Time
Real defense spending is higher than at the Reagan buildup, but is (much) lower as a ratio of real GDP.
Guest Contribution: “The Fed Stays the Course”
Today, we present a guest post written by David Papell and Ruxandra Prodan, Professor and Instructional Associate Professor of Economics at the University of Houston.
Timing: CHIPS Act or Military Keynesianism and the Manufacturing Building Boom
Reader JohnH, on considering the timing of the boom in manufacturing structures investment, writes: