April and May inflation was overpredicted by year-ahead consumer-based surveys.
One Year Ahead Inflation Expectations
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CNY Overtakes CAD in FX Trading, CB Reserve Holdings in 2022
Talking about the dollar as an reserve currency next week [2], and noticed these interesting trends.
Private Nonfinancial Corporate Debt-Service-Ratio
In yesterday’s post, I noted a recession forecast based on a probit specification incorporating a debt-service-ratio yielded a substantially lower probability for 2024M05 than a plain vanilla specification. Part of why this is true is that the debt-service ratio is fairly low, despite high Treasury yields.
Expect More Houstons
From Bloomberg:
Recession Probabilities in Light of the Ever-Receding Recession
If no recession is forthcoming, what can we conclude, given most term spread models were signaling a “sure bet”? Unlikely outcome (it’s a probabilistic world!), breakdown in historical correlations, omitted variable problem? In order to shed some light on this question, I examine probability estimates from (i) plain vanilla spread, (ii) debt-service-ratio and foreign term spread augmented, and (iii) term-premium adjusted spread specifications.
May SPF GDP Forecast (updated w/17 May Nowcasts)
Continued growth (report):
Wisconsin Employment Trends Sideways
DWD reports on April figures. This allows for the following picture of Wisconsin macro aggregates.
Import Prices Surprise
The index came in at +0.9% vs. +0.2% m/m.
Business Cycle Indicators, Mid-May
With industrial production slightly under consensus (0% vs. 0.1% m/m), we have the following picture of key indicators followed by the NBER’s Business Cycle Dating Committee (with heaviest weight on nonfarm payroll employment and personal income excluding transfers).
The Trend Break in CPI
Readers [1] [2] inquired why there appears to be a trend break in (log) CPI at 2022M06. My best guess is the spike in oil prices.