The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.0% annual rate in the third quarter. That is close to the long-term historical average of 3.1%, and better than the 2.1% we’ve seen on average since the Great Recession ended in 2009.
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Senator Flake’s prepared comments announcing his resignation from the Senate (from CNN):

Mr. President, I rise today to address a matter that has been much on my mind, at a moment when it seems that our democracy is more defined by our discord and our dysfunction than it is by our values and our principles. Let me begin by noting a somewhat obvious point that these offices that we hold are not ours to hold indefinitely. We are not here simply to mark time. Sustained incumbency is certainly not the point of seeking office. And there are times when we must risk our careers in favor of our principles.

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My last two posts [1] [2] on the Wisconsin economy refer to employment. A broader measure of economic activity, meant to track state Gross Domestic Product, is provided by the Philadelphia Fed’s coincident indices. That indicator for Wisconsin is currently decreasing; the October 2 release (for the index through August) indicate the most recent peak was June, and has been declining since. This is shown in Figure 1. Moreover, the leading index points to continued contraction over the next six months.
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The Wisconsin Department of Workforce Development touts employment growth. Here is a graph comparing reported employment and Walker’s August 2013 promise (which reader Alan Goldhammer reminds me of).

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Figure 1: Cumulative sum of mass shooting casualties, beginning in 1982M08; deaths (red), wounded (pink). October observation for data through 10/2. Source: Mother Jones.

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Source: The Hill.

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If one was looking back at the data available a half a decade ago, an observer (not me) might have concluded that there was a hiatus in per capita output that signalled an end to growth.

Figure 1: GDP per capita in thousands of Chained 2005$, SAAR, as of September 28, 2012, calculated using GDP and population reported at that date. On log scale. Source: St. Louis Fed ALFRED, and author’s calculations.

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Even more draconian than outright repeal.

Source: CBPP.

As I was compiling background notes for the new semester, I found the current level and trend in the term spread of interest.

Figure 1: Ten year minus three month Treasury spread (blue), and ten year minus two year spread (red), %. Observations for September are 9/5. NBER defined recession dates shaded gray. Source: FRED, Bloomberg, NBER and author’s calculations.

Run the probit regression

    recession_t+6 = -0.81 -0.474×(GS10-TB3MS)_t + 0.065×TB3MS_t + u_t

over the 1967M01-2017M02 period (McFadden R² = 0.24); the implied probability of recession is 10% for February 2018.

Using a specification without the level of the short rate included leads to a slightly higher probability, 14% or so.

The detail is also interesting. The spreads are smaller than they were in October 2016.

Figure 2: Ten year minus three month Treasury spread (blue), and ten year minus two year spread (red), %. Observations for September are 9/5. Source: FRED, Bloomberg, and author’s calculations.

Here at this conference today:

Friday, August 25, 2017
Chair: Susan M. Collins
Former Dean, Gerald R. Ford School of Public Policy

University of Michigan

8 a.m.
Opening Remarks

Janet L. Yellen | Speech
Chair
Board of Governors of the Federal Reserve System

8:30 a.m.
Fostering Business Dynamism and Ensuring Competitive Markets

Authors: Chang-Tai Hsieh | Paper
Professor
University of Chicago

Pete Klenow | Paper, Remarks
Professor
Stanford University

Discussant: Gita Gopinath | Remarks
Professor
Harvard University

9:05 a.m.
General Discussion

9:55 a.m.
Income Inequality and the Distribution Aspects of International Trade

Author: Nina Pavcnik | Paper, Remarks
Professor
Dartmouth College

Discussant: David Dorn | Remarks
Professor
University of Zurich

10:30 a.m.
General Discussion

10:55 a.m.
Panel on the Changing Landscape of International Trade

Panelists: Ann E. Harrison | Remarks
Professor
University of Pennsylvania

Catherine L. Mann | Remarks
Chief Economist

Organisation for Economic Co-operation and Development

Peter K. Schott | Remarks
Professor
Yale University

John Van Reenen | Paper, Remarks
Professor
Massachusetts Institute of Technology

11:55 a.m.
General Discussion

1 p.m.
Luncheon Address

Mario Draghi | Speech
President

European Central Bank

2 p.m.
Adjournment

Saturday, August 26, 2017
Chair: Randall S. Kroszner
Professor

University of Chicago

8 a.m.
Balancing Short-term Fiscal Stimulus with Longer-term Sustainability

Authors: Alan J. Auerbach | Paper
Professor

University of California-Berkeley

Yuriy Gorodnichenko| Paper
Professor
University of California-Berkeley

Discussant: Jason Furman | Remarks
Professor

Harvard University

8:35 a.m.
General Discussion

9 a.m.
Achieving Balanced Global Growth

Author: Menzie Chinn | Paper, Remarks
Professor

University of Wisconsin

Discussant:
Maurice Obstfeld |Remarks

Economic Counsellor
International Monetary Fund

10 a.m.
General Discussion

10:25 a.m.
Overview Panel

Panelists: Norman Chan | Remarks
Chief Executive
Hong Kong Monetary Authority

Timothy J. Kehoe | Remarks
Professor
University of Minnesota

Carmen M. Reinhart
Professor
Harvard University

11:25 a.m.
General Discussion