I had a thought today. I don't know that it matters much, but here it is.
You may recall that I wrote a post a few days ago explaining which metrics are used by NBER to date the starting points of recessions. GDP is not one of those metrics for the monthly dating, but it is used by NBER for their quarterly dating. Or, to be more accurate, they use an average of real GDP and real GDI (Gross Domestic Income).
You may also recall that although GDP and GDI are theoretically equal, in practice they differ due to real-world measurement errors. This difference is called the "statistical discrepancy" and it's been unusually large lately. Here's the average of the two over the past few years:
For what it's worth, the average of GDI and GDP was positive in the first quarter, not negative. This means that, as far as NBER is concerned, we haven't had two consecutive quarters of negative growth. Depending on what gets reported for the second quarter, we might not have any quarters of negative growth.¹
I have no special insight about what this means, if anything. I just thought it was interesting.
¹GDI for the second quarter will be released on August 25.
There is no recession if everyone who wants a job has a job. And that is surely the case today. If you need work, move to Michigan.
No recession but no growth in real incomes either. hopefully, some of the new jobs from the "Inflation Reduction Act" or whatever it's called, will help increase wages.
That's based on current prices. Future prices may not be the same.
Are you & middleoftheroaddem part of the same Council of Conservative Citizens?
No growth in real income for most people has pretty much been the norm for most of the last 50 years.
Thanks, Carter!
...are you still talking about this???
Probably a post lockdown/port clog mess. July probably was the beginning of moving the stalled product with price because cuts.
700000 barrels of Russian oil is moving through Egypt into then Europe and the States.
What this means is that these measures are subject to even more error than was previously thought. Repeating myself from a few days ago, how could we be producing less stuff* with half a million more people working?
The actual economy is people working at their jobs, providing goods and services, and earning income with which to buy the goods and services other people are providing. With half a million more people working than in the previous month, the economy is clearly, undoubtedly growing.Yet the FOMC is looking at crappy measures that miss this obvious fact. Yes, golack, Kevin is still talking about this; I wish a thousand economists were, also.
*services as well as goods, of course
Are manufacturers underreporting production to make joebiden & the Democrat Party look bad so that the GQP will retake Congress in 2022 & Trump will resume his despocy in 2024?
I came across a write up explaining some of this is an artifact--stores ordered too much inventory at the end of last year, then cut back this year. People aren't buying as much and products are getting delivered in a timely fashion now. In other words, production was just pulled forward...and it should be stabilizing now.
And imports don't count...
https://research.stlouisfed.org/publications/page1-econ/2018/09/04/how-do-imports-affect-gdp
Also--the Earth is spinning faster, and it's shouldn't...
https://www.salon.com/2022/08/05/earth-is-spinning-faster-than-it-should-be-and-no-one-is-sure-why/
Which side of the income is affecting GDI -- foreign investments in US or US investments overseas? Are US corporations repatriating production to the domestic market?
One of the problems I have with economic "reporting" and people like Drum is that they don't stick to the traditional measures of the subject at hand
Yes, inflation went out of control and yes the FED acted.
But this "do we have a recession?" "do we not have a recession" talk is useless if you are going to move the goalposts to make your point.
Are we in a recession? If the traditional measure is two months of negative GDP growth I guess we are. Then we should be congratulating Biden for huge growth in jobs DURING a recession. Duh.......
If we are NOT in a recessions then the FED is acting responsibly to bring down inflation........duh
And yes the price of oil is down below $89/bbl as we speak and the Bank of England is forecasting a recession there, meaning north Sea Brent will become cheaper for our refiners to make gasoline which will translate into happier people which may translate into Democrat victories.
Gas here has declined from $4.54 to $3.82 per gallon in the last 3 months and they started falling about 45 days AFTER the price of oil started dropping so I expect more drops in the forthcoming weeks
But c'mon Kevin - stick to the classic measures and be consistent in using them
What does one do when the ‘traditional measures’ clearly give one a false picture of reality? Do we still insist on the existence of phlogiston and the luminiferous ether?
Two quarters of declining GDP has never been the official standard for declaring a recession. As noted in the article, that is just one of the factors, and the GDP is not the only measure used.
The problem is that you"traditional measure" is not the traditional measure. The traditional measure is the declaration of a committed of business cycle economists working for the NBER that we are in a recession, and has been for almost 100 years.
The NBER considers many indicators, not just GDP, and employment is one of those other factors.
O/t but have to say, former GQPer @dobermanboston is correct: the Teabagger/MAGA movement is modern-day YIPPIE movement. Just bad theatre all the way down.
I wonder when Joel Osteen will try to end Democrat war on American values by levitating the Department of Education building.
https://mobile.twitter.com/LauraJedeed/status/1555557890806644738