Business cycle indicators in mid-November

Industrial production fell 0.1% month over month, against the Bloomberg consensus of +0.2. Nonfarm payrolls rose strongly in October. Other key indicators followed by the NBER Business Cycle Dating Committee.

Figure 1: Nonfarm Payroll Employment, NFP (dark blue), Bloomberg Consensus as of 11/16 (blue +), Civilian Employment (orange), Industrial Production (Red), Personal Income Excluding Transfers in Chapter 2012 USD (green) and Manufacturing Trade Sales in Ch.2012$ (black), Consumption in Ch.2012$ (light blue), Monthly GDP in Ch.2012$ (pink), GDP (blue bars), all logarithms normal to 2021M11 = 0 The GDP for the third quarter is now GDP for 11/16. Lilac shading indicates a hypothetical recession in 2022H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (issue 11/1/2022), GDPNow (11/16) and author calculations.

While industrial production fell, and industrial production rose just 0.1% versus 0.2% month over month, retail sales far exceeded expectations.

GDP is now as of today 4.382% qoq in the fourth quarter. Given the possible revisions in GDP and the evolution of GDO, it seems (still) unlikely to me that a recession will occur in 2022H1. However, a recession in 2023 seems likely given the inversion of the yield curve and other predictions.

This entry was posted on by Minzy Chen.

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