An e-book with contributions by Torbjörn Becker, Barry Eichengreen, Yuriy Gorodnichenko, Sergei Guriev, Simon Johnson, Tymofiy Mylovanov, Maurice Obstfeld, Kenneth Rogoff, and Beatrice Weder di Mauro.
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So You Think We’re In a Recession as of Mid-August?
Weekly and daily readings through 8/13:
Looking Back at Q2 – Imminent Upward Revisions?
IHS Markit moves 2022Q2 tracking from -0.3% to -0.2% SAAR today. Goldman Sachs moves from the advance official of -0.9% to -0.4% SAAR. Continue reading
Movement in Prediction Markets
The impact of news, in the past three hours…
Prediction Markets on Congressional Control
Bets on Democratic control of one or both houses of Congress now up to 63%. Big discrete move at the Dobbs decision, then gradual convergence to 50-50 on August 1st, starting in mid-July.
Summarizing the Arguments: Recession in July?
From Goldman Sachs (A.Nathan, J.Grimberg) today:
Despite last week’s Q2 GDP release that showed growth contracting for a second consecutive quarter—tripping the rule of thumb that two quarters of negative growth constitute a recession—we don’t think the US is officially in recession. We note that the indicators that the NBER places the greatest weight on for determining monthly and quarterly business cycle peaks have all continued to increase, as gross domestic income rose in the first quarter and nonfarm payrolls have continued to grow at a rapid pace. And while labor market data has historically lagged other economic indicators, we find that it would be historically unusual for the labor market to appear as strong as it is at present even at the very outset of a recession. We see Q2 corporate financial results and management guidance as providing further evidence that the economic expansion continued during the second quarter, and also view the message from credit market fundamentals as reassuring. That said, growth has slowed substantially, and as a result we continue to expect the Fed to slow the pace of tightening from here, delivering a 50bp hike in September and 25bp hikes in November and December.
Nowcasts, August 1
From Atlanta Fed and IHS Markit:
The Ratio of GDI to GDP
Is at record highs (at least back to 1947, using latest available data).
What Pushed Nowcasts Up?
Following up on the previous nowcast post, there are two items of relevance: (1) trade balance (for May); (2) manufacturing orders. Here’s trade balance (release):
The Fiscal and FX Crises of the Russian State (in War)
From Business Retreats and Sanctions Are Crippling the Russian Economy (July 2022):