Monthly GDP from S&P Global Market Insights is up 0.3% in March (3.9% annualized), final sales up 6.3% (annualized). This follows on the heels of Thursday’s announcement that nominal personal income and nominal personal spending exceeded consensus by 0.1 ppts m/m. Here is a picture of the key series followed by NBER’s Business Cycle Dating Committee, augmented by monthly GDP (where the top two are real personal income excluding current transfers and nonfarm payroll employment).
Category Archives: recession
Best Guess on the Recession Start Date
I was asked about my guess for the recession’s start. I said consensus was for 2nd or 3rd quarter this year, about 6 months from now. Then I wondered a bit. According to Miller (2019) (discussion here), the highest AUROC at 6 month horizon is the 5 year-Fed Funds rate spread. What does this spread indicate?
Plain Vanilla Term Spread Recession Probabilities
Anxiety provoking graphs generated while prepping for lecture.
Foreign Term Spread Augmented Recession Model Prediction
About 83% probabiity within a year: Here’s the edited version of Table 3 of Ahmed-Chinn (2022), plugging in March 31, 2023 values (in red), which I prsented in a UW Milwaukee Department of Economics seminar today (thanks to my gracious hosts, who provided tons of great comments/criticisms).
Business Cycle Indicators, mid-April
Business Cycle Indicators as of April’s Start
We’ll see if it’s the cruelest month. For now, monthly GDP continues to grow in February, albeit slowly (0.2% m/m) while January growth was revised up.
Business Cycle Sit-Rep, End-March
With the release of the personal income and spending release, we have real consumption (-0.1% vs. 0.0% m/m consensus) and personal income through February; also released today is real manufacturing and trade industry sales. Below, in the graph of key business cycle series followed by the NBER Business Cycle Dating Committee, I add the 3rd release of 2022Q4 GDP (discussed in context of GDO and GDP+ in yesterday’s post).
FT-IGM March Survey – Expectations Post-SVB
Here’s the growth path according to the FT-IGM survey that closed March 16th, about a week after the unfolding of events surrounding SVB.
Weekly Macro Indicators, thru 3/18
Here’re some indicators at the weeky frequency for the real economy. Bloomberg notes that GDPNow (3/16) combined with SEP median of 0.4% growth rate for 2023 implies 3 quarters of negative GDP growth starting in Q2. The latest data below relate to late in Q1.
Recession Chances: Fed Pause vs. Banking Shock
Goldman Sachs raised the probability of recession from 25% to 35% in light of the SVB related turmoil (although their guess is still lower than the consensus). This prompted me to wonder what was the net effect of the turmoil and Fed response (less tightening) on economic activity.