Right here’s GDP, GDO, and GDP+ by means of 2022Q3, and month-to-month indicators by means of 2022M10. I (nonetheless) don’t see a recession in 2022H1.
Determine 1: GDP (black), GDO (tan), and GDP+ (teal), all in bn.Ch.2012$, in logs, 2019Q4=0. GDP+ index calculated by cumulating q/q progress charges from 2018Q2. Hypothesized 2022H1 peak-to-trough recession dates shaded lilac. Supply: BEA 2022Q3 2nd launch, Philadelphia Fed (11/30/2022), and writer’s calculations.
Notice that GDO displays a smaller decline in GDP for Q1 and Q2 than GDP. GDP+ (mentioned right here) displays optimistic progress all through — though at a slower tempo (remembering that because the collection are proven in log phrases, a flatter slope denotes slower progress price). Take into account that GDP is prone to be revised time and again (see right here).
What about month-to-month indicators, as in comparison with car miles traveled which has been posited as an indicator of recession? Some are proven under (standard ones adopted by NBER BCDC proven right here).
Determine 2: GDP+ (blue bar), coincident index (teal), mixture weekly hours adjusted to preliminary benchmark revision (darkish purple), month-to-month GDP from IHS Markit (pink), and car miles traveled, s.a. (orange), all normalized to 2021M11=0. GDP+ index calculated by cumulating q/q progress charges from 2018Q2. Hypothesized 2022H1 recession dates shaded lilac. Supply: Philadelphia Fed (11/30/2022), Philadelphia Fed (11/23/2022), BLS, BLS preliminary benchmark revision, IHS Markit (11/1/2022), BTS through FRED, and writer’s calculations.
Notice that whereas car miles traveled (VMT) as reported is under 2021M11 ranges, given the instances we stay in, I’m undecided VMT is a dependable indicator of recession, if it ever was (see this submit). In distinction, the opposite indicators — GDP+, Philly Fed coincident index, or mixture hours — present little proof of a recession occuring in 2022H1.
