We’re roughly a month into Q3. Here’s a view, written a week ago:
…based on the indicators I track, yes, I think we are in continuing recession, and I expect a hard reset of the economy in H2.
So You Think We’re In a Recession as of End-July – UI Initial Claims Edition
Some observers argue the rise in unemployment insurance claims signals we are in, or soon to be, in a recession (e.g., [1]). Here’s an alternative view (A follow up on “So you think we might be in a recession today” Part I, Part II, Part III, Part IV, Part V, Part VI, as well as “So you think we might be in recession as of mid-June”, Part I and Part II, and “So you think we might be in a recession as of mid-July”.)
The CPI Level
Reader Bruce Hall writes:
July Inflation Undershoots Expectations
From today’s release:
Movement in Prediction Markets
The impact of news, in the past three hours…
Inferring Economic Activity from Gasoline Use?
If so, consider the gasoline intensity of GDP:
A Short Note on Idiotic Comments
Reader Steven Kopits writes:
One Year Ahead Inflation Expectations for July (and Forward 2-3 Year) Drop
The NY Fed measure of inflation expectations dropped dramatically from 6.8% in June to 6.2% in July. This is a much larger drop than the Michigan series (0.1ppt).
Inflation Expectations vs. Fed Inflation Target: Now Not That Far Off (If It Ever Was)
The Fed’s inflation target is 2% on PCE inflation. CPI inflation has averaged 0.5 ppts above PCE inflation since 1967. Putting these two points together, we see that expected inflation over the next five years is pretty close to target (h/t Mark Zandi).
NFP Growth of over 500K in Historical Perspective
Reader Rick Stryker writes:
It’s a good thing that Mitt Romney didn’t criticize the Biden economy by saying that we should be seeing 500K job increases, because that would have triggered another multi-year rant from Menzie that that’s IMPOSSIBLE!!!