I found this Bloomberg article about the exhaustion of pandemic-benefits related savings of interest and the coming consumption crash of interest.
Recession Probabilities (using data through end-2022)
In a project with Laurent Ferrara, we have been examining the properties of financial indicators as predictors of (NBER defined) recessions. In addition to the term spread, we have considered Financial Conditions Indices (Arrigoni-Bobasu-Venditti, Goldman Sachs), the foreign term spread (a la Ahmed-Chinn) and the BIS debt service ratio (suggested by Borio-Drehmann-Xia). Slides from presentation in June here.
The Recession of 2022H1 – Rec Vehicles, but No Spam
Reader Steven Kopits, in response to a posting of alternative indicators, writes:
Kopitsian (and Other) Recession Indicators
I’m not of the mind that a recession is going to be avoided, despite increasing confidence this will be the outcome. However, it is hard to find indicators the recession is here, even when looking at measures Steve Kopits (of 2022H1 recession fame) has mentioned.
Dispersion in GDP Q3 Tracking [updated]
GDPNow at 5.6% (SAAR), St. Louis Fed “news” nowcast, at -0.25%. Goldman Sachs and BofA at 3.1%…
World Trade Volume Stalls
The Dutch CBP tallies world trade volumes. Here’s the total world trade series, compared to total industrial production (production weighted), since 2000.
Term Spread Watch – Is This Time Different?
A reporter for Marketplace (hear piece at 10 minutes in) asked me today whether this time was different, especially in light of all the positive coincident indicators (Q3 GDPNow has been at 5.6% for a couple weeks; Fed staff has upgraded q4/q4 growth, Goldman Sachs pegs recession probability at 15%). I was (I hope properly) circumspect.
Monthly GDP and Coincident Index
The Brave-Butters-Kelley monthly GDP for June is out. Here’re growth rates of this series compared against the SPGMI (formerly IHS/Markit) monthly GDP, and the Philadelphia Fed’s coincident index, which should track GDP.
Mean and Median Average Hourly Earnings Growth Compared
Anonymous tells a story about an old engineer regaling people with aphorism like “you may know the significant digits but do you know the significance of the number”, in talking about what the average joe is experiencing. Here are some easily calculated numbers showing the distinction between mean and median average hourly earnings (note that median usual weekly earnings are the product of median earnings and median hours worked).
Guest Contribution: “Startups create fewer jobs and do not survive as long as previously reported”
Today, we’re pleased to present a guest contribution by Rob Fairlie Professor of public policy and economics at UCLA.