Today, the Confidence Board’s consumer confidence index clocked in at 110.7, vs. Bloomberg consensus of 103.8. The Michigan survey of consumer sentiment and to a lesser extent the Conference Board survey of confidence have diverged from their historical correlation with inflation and unemployment. Interestingly, while the Michigan measure in particular has deviated from the text based measure, they have both now started reverting toward the text based measure.
The Macroeconomic Outlook in Wisconsin
Biden is visiting Wisconsin. it’s interesting to see how the state economy is doing, and what the Evers administration is forecasting (based primarily on national macro developments).
Instantaneous Inflation in the Euro Area, US
Headlines indicate 2.4% y/y HICP inflation in the euro area hitting consensus. Instantaneous inflation per Eeckhout (T=12,a=4) is 0.4%.
Urals and Brent Oil Prices
Houthi attacks on shipping spur rise in oil prices. Here’s a graph to put things in perspective, for the world price, and the price Russia is getting for its oil.
Gasoline Prices Continue Downward
Last week, I was asked about the likely future trajectory. As of the week ending today, prices still falling (from $3.23 to $3.14).
CBO on the Economic Outlook: No Downturn, Higher Rates
From CBO’s Current View of the Economy From 2023 to 2025:
Compared with its February 2023 projections, CBO’s current projections exhibit weaker growth, lower unemployment, and higher interest rates in 2024 and 2025.2 The agency’s current projections of inflation are mixed relative to those made in February 2023.
Guest Contribution: “Fix Air Traffic Control!”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate. Thanks for comments are due Dorothy Robyn and Sohaib Nasim.
“Russia’s Economy is Falling Behind”
From Treasury’s assessment of the prospects for the Russian economy.
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.
Business Cycle Indicators, Mid-December
Industrial production under consensus (+0.2% [corrected 12/16] m/m vs +0.3% Bloomberg consensus). Here’s the picture of some key indicators followed by the NBER Business Cycle Dating Committee, plus monthly GDP and GDPNow.