U.S. Total Nonfarm Payrolls and Recessions Total nonfarm payrolls increased 224K in June, well above expectations, which should calm fears of a near-term recession. The job market is still strong, even if there are signs it is slowing down. Actually, nonfarm payroll growth tends to decline before a recession. You may also like “What Is…
One of the Best Indicators to Monitor for Signs a U.S. Recession Is Over The probability of being unemployed in a given month in the United States, by dividing the average initial claims for unemployment insurance by the total number of people working, is one of the best indicators to monitor for signs a U.S.…
What Indicators to Watch for Signs a U.S. Recession Is Coming? 1) In recent history, a recession occurs about 12 to 18 months after the spread between the 30-year and the 3-month treasury yields turns negative (red arrow). When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term…
U.S. Economy Has Prospered While Europe Has Slowed This chart shows how the US economy is strong compared to European countries. And despite full employment, US real GDP should stay above potential GDP. Image: Financial Times
One of the Best Indicators to Monitor for Signs a U.S. Recession Is Coming The probability of being unemployed in a given month in the United States, by dividing the average initial claims for unemployment insurance by the total number of people working, is one of the best indicators to monitor for signs a U.S.…
Are We Near a Recession? “The leading index for each state predicts the six-month growth rate of the state’s coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply…
Why Potential GDP Has Been Cut in Half Since the 1950’s? The main reason is a lower productivity than previous business cycles, due to: – lower population growth – the service sector is growing faster than the industry sector – lower quality jobs in the service sector have a lower productivity than in the industrial…
How’s the U.S. Economy Doing Now? The real GDP Nowcast relies on soft data such as consumer and business surveys and hard data such as retail sales and industrial production. It forecasts the growth of real GDP. At full employment, GDP returns to the level of potential GDP. If a recession were to occur today,…
Is Trump Right to Criticize Powell? We don’t think so, because: – Interest rates are still near zero in real terms and below real GDP – The rise in Fed rates has very few visible negative effects in the USA – And at full employment, GDP returns to the level of potential GDP
When Do Recessions Occur in the US? Since 1948, recessions occur in the US after the unemployment rate is lower than the natural rate of unemployment (long-term), with a very high degree of confidence.