Category Archives: Uncategorized

GDP, GDP+, Final Sales

Jim noted recurrent delays in the long heralded recession in his Thursday post. Here are some additional reflections on where economic activity has been, and where it is heading, relying on additional data. GDPNow (which hit the mark for Q1 growth) indicates continued growth through Q2. S&P Global Market Insights (nee Macroeconomic Advisers) indicates a plateau has been reached. Final sales (i.e., GDP ex. inventories) suggests continued growth.

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How Well Do Adaptive Inflation Expectations Do, 1982-2023?

Answer: so-so.

Reader Erik Poole commenting on this figure (in this post) writes:

Assuming that the all the inflation forecasts are one-year forecasts in the above chart, do we have any kind of inflation expectations data for shorter time frames, such as 6 months?

The above is a fancy way of asking: are financial markets and professional forecastersb really that bad at forecasting inflation?

Glancing at the above chart, it appears to make a good argument for adaptive expectations driving economic agents inflation expectations.

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