Editor’s note: This article was originally published on Aug. 28 by Menzie Chinn here.
Several of the five key indicators referenced by the NBER’s Business Cycle Dating Committee are decelerating, as shown in Figure 1.
Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for August employment (light blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2019M02=0. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (8/3 release), NBER, and author’s calculations.
We will get August employment numbers in a week. Manufacturing and trade industry sales rebounded smartly in data going through June.
Income and outlay data were released today. While real disposable income is above pre-COVID-19 levels, it is declining. Consumption, on the other hand, has slowed its ascent, and is some 5% below NBER-defined peak levels.
Figure 2: Consumption in Ch.2012$ (blue), and real retail sales in CPI-deflated 1982-84$ (brown), both in logs, 2020M02=0. Source: BEA, Census, BLS via FRED, NBER, and author’s calculations.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.