Image Source: e joins the .Current indicators are not very supportive of an imminent recession:Figure 1: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary benchmark (bold blue), civilian employment (orange), civilian employment adding number of workers indicating unemployed due to weather (orange square), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP (blue bars), all log normalized to 2021M11=0. Source: BLS via FRED, Federal Reserve, BEA 2024Q3 1st release, (nee Macroeconomic Advisers, IHS Markit) (11/1/2024 release), and author’s calculations. show a similar story. And the Sahm rule (real time) is now below the trigger rate:Figure 2: Sahm rule (real time) indicator, % (blue). Trigger at 0.5 ppts. Source: FRED.Nor is (my preferred – variation on ) forecasting equation showing a recession soon, although a simple term spread model still signals warning (see discussion ).Figure 3: Estimated 12 month ahead probabilities of recession, from probit regression on term spread and short rate, 1986-2024 (blue), on term spread, short rate and debt-service ratio (tan). NBER defined peak-to-trough recession dates shaded gray. Source: Treasury via FRED, BIS, NBER, and author’s calculations.More By This Author:UMich Sentiment Catching Up With The (Good Economic) News?Business Cycle Indicators As Of November’s Start The Employment Release: Downside Surprise, Signifying?
Recession After The Election?
