That’s EJ Antoni/Heritage Foundation, writing in September 2022. A note of caution in declaring a recession.
In addition, the data selection of the Biden administration has come back to bite him, even his selected data points are now being revised to indicate a recession. And while these numbers confirm the recession in the first half of the year, the rest of this year holds little promise of recovery.
A reminder of what data we know now about 2022H1, and what happens after that.
Figure 1: Nonfarm Payroll (bright blue), Bloomberg consensus of 2/1 (blue +), employment (orange), industrial production (red), personal income excluding current transfers by Ch. 2017$ (bright green), production and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (blue), and monthly GDP in Ch.2017$ (pink), the GDP, 2023Q4 pre-release (blue bars), all log normalized to 2021M11=0 . Hypothesized collapse 2022H1 shaded in light blue. Source: BEA, BLS via FRED, Federal Reserve, 2023Q4 advance release,, S&P Global Market Insights (with Macroeconomic Advisers, IHS Markit) (2/1/2024), and author’s calculations.
What about the law of Sahm (real time)?
Figure 2: Real-time indicator of Sahm’s law, in % (blue). Threshold means the red dashed line. Recession tolerant lilac shade 2022H1. Source: FRED.
Also, keeping in mind that the NBER’s BCDC does not place primary reliance on GDP, here are some other outputs.
Figure 3: GDP (blue), GDO (tan), and GDP+ (green), final sales (red), all in bn.Ch.2017$ SAAR. GDP+ assumes 2019Q4 GDP+ equals GDP. Hypothesized collapse 2022H1 shaded in light blue. Source: BEA 2023Q4 advance estimate, Philadelphia Fed, and author’s calculations.
So, now Dr. Antoni has declared that we are in a state of economic collapse, as happened a few weeks ago. He may end up being right. As of yesterday, the figures are rising, the Lewis-Mertens-Stock Weekly Economic Index is running at 2.37%.
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