National manufacturing employment peaks nearly a year later, August 2019.
Gross vs. Net Investment, Pre- and Post-TCJA
In other words, the sugar high fades. Brad Setser has noted how weak nonresidential fixed investment has been, despite the TCJA. It looks worse when looking at net — rather than gross — investment.
Recession Probabilities, September-October 2020
Plain vanilla 10yr-3mo probit yields 37% probability of recession in October next year. Adjusting the spread by the 10 year term premium estimate (Kim-Wright) implies only a 6.5% probability in September (vs. 46.4% plain vanilla). Augmenting the term spread with the 10 year term premium implies a 42.2% probability for September…
Deceleration
As noted by Jim. Over the last week, we’ve received new readings on employment, income, sales, and monthly GDP:
Growing a little more slowly
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 1.9% annual rate in the third quarter of 2019. That’s a little below the 2.3% average rate since the recovery from the Great Recession began in 2009:Q3.
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Real House Prices Decline
Case-Shiller indices came out today. August prices for the 20 city index declined m/m, and Zillow’s forecast for the CS 20 city index in September was for another decline. This is shown in Figure 1:
Exactly How Much Does the Mainstream Literature Ignore Demographics?
Reader Steven Kopits writes about the economics profession:
MMT in (Relatively) Plain English
Guest Contribution: “Weaponization of the Dollar May Backfire”
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 in Project Syndicate.
Growth Deceleration?
The nowcasts indicate slowdown.