One of the mysteries of recent times has been the divergence between conditions (say, as measured by the Misery Index) and measured consumer sentiment. Figure 1 shows the U.Michigan sentiment index (FRED variable UMCSENT) vs. the sum of inflation and unemployment rates over the 2016-24M01 period. The jump in UMCSENT of 9 was about 2 standard deviations (for the 2016-23 period), on top of the nearly two deviation jump in December, and goes some way to redressing the gap.
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Inflation Nowcasts and Expectations
NY Fed median expected y/y CPI inflation at 3%. Nowcast for core y/y at 3.9%.
The Year in Review, 2023: Deep State @ BLS, Russia’s Expanded Invasion No Big Deal (to the World Economy), and Wisconsin’s Senator Theoden
Slightly behind schedule, my year reviewed. Last year’s recap was entitled “Year in Review, 2022: Vast Data Conspiracy by BEA, “Drill, baby, drill!”, and the Ills of Diversity” This year, with rational policymaking returning, it’s time to keep on trying to erase stupidity.
Sentiment by Survey and by Text Analysis
The Michigan survey of consumer sentiment has diverged its correlation with unemployment and inflation, as has (to a lesser degree) the Conference Board survey of confidence. Interestingly, they’ve both diverged from sentiment as measured by text analysis.
Michigan Sentiment (Prelim) Surprises
on the upside. But the disjuncture between (inverted) misery and sentiment (and confidence) continues.
Russia Invasion Skeptics on the Eve of the War
Good to remember, as we come up to Russian expanded invasion +2 years. Reader JohnH (February 16th, less than a week before the “Special Military Operation”‘s commencement, ridiculing the thought that Russia was embark on further aggression:
Sentiment down 46%, Confidence down 25% Relative to Pandemic Eve
And sentiment down 21% relative to Biden’s start, confidence up 13%.
GDP Q4 Nowcasts of November 17th
Lots of agreement around 2% SAAR, with NY Fed at 2.45%. Here’s a graphic depiction of the implications for the level of GDP.
GDP and Interest Rate Forecasts and Recession from the SPF
The Q4 Survey of Professional Forecasters was released Monday. Accelerated growth is forecast, no yield curve dis-inversion, and triggering of the Sahm rule.
Taiwan Straits Balance of Forces, 2023
From DoD’s 2023 report on PRC’s military and security developments.