I write down this post “Shadow of ShadowStats” which is now offline and only available by subscription. Referring to the relative decline in inflation, Peter St. Onge (Legacy) and Jeffrey Tucker (Brownstone Center) argued in June that not only are we in a recession, but we’ve been in a recession for the past four years!
They note that John Williams’ ShadowStats (help reviewed in the past, here) shows much higher inflation than officially reported. They also point out that retail sales contracted and new manufacturing orders declined from early 2021 (easily outpacing the NBER’s 2020M02-04 recession period and 2020M04-M12 recession period).
They also emphasize the fact that in defining the product, public consumption should be excluded, or else, private consumption should be the focus. In Figure 1, I show the relevant series.
Figure 1: GDP (black, left scale), previous government spending GDP (blue scale, left), consumption (teal, right scale), all in bn.Ch.2017$ SAAR. Source: BEA 2024Q2 second release by FRED, author’s calculations.
Previous government consumption of GDP looks similar to GDP (and very close to GDO and GDP+, shown in this post). There are negative growth rates in consumption, but there are no events for two consecutive quarters, which seems to be a criterion for St.Onge-Tucker.
Note that Dr. Antoni went to another place and revealed that there was a recession in 2022H1.
Source link