Manufacturing Employment Lags in Three Midwest States

Figure 1: Manufacturing employment in US (blue), and aggregate of Michigan, Pennsylvania, and Wisconsin (red), both in logs, 2018M12=0. December data preliminary. GM strike in October. Source: BLS, author’s calculations. 

Michigan, Pennsylvania and Wisconsin aggregate manufacturing employment 1% below peak. In contrast, nationwide manufacturing employment (total, including managerial) has been flat from September 2019.

Spot the Incipient Recession

Most accounts these days suggest the risk of recession has abated, given the strength of various indicators, and the un-inversion of the yield curve. This made me wonder what two key indicators look like in real time on the eve of a recession. Take a look at these two graphs, to see which one denotes data just before a recession.

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Planes, Trains, and Automobiles – and Trucks

Figure 1: Freight Transportation Services Index (bold black), Truck Tonnage Index (tan), Vehicle Miles Traveled (green), Rail Freight Carloads (red), Rail Freight Intermodal Traffic (blue), Air Revenue Ton Miles of Freight and Miles (purple), all in logs, 2019M08=0. Source: BTS via FRED, and author’s calculations. 

All series are below peak.

GAO: “Office of Management and Budget—Withholding of Ukraine Security Assistance”

From GAO today on “the drug deal”:

In the summer of 2019, the Office of Management and Budget (OMB) withheld from obligation funds appropriated to the Department of Defense (DOD) for security assistance to Ukraine. In order to withhold the funds, OMB issued a series of nine apportionment schedules with footnotes that made all unobligated balances unavailable for obligation.

Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law. OMB withheld funds for a policy reason, which is not permitted under the Impoundment Control Act (ICA). The withholding was not a programmatic delay. Therefore, we conclude that OMB violated the ICA.

Full decision here.