Reader Steven Kopits, in response to a posting of different indicators, writes:
I’m fairly snug with each my H1 2022 name and with the function of gasoline/diesel consumption and VMT as indicators of financial stress or consolation, because the case could also be.
Here’s a longer span of different indicators, to focus on the truth that utilizing VMT, gasoline consumption or petroleum use, would recommend now we have been and stay in a recession.
Determine 1: Civilian employment from CPS (pink, proper log scale), Car Miles Traveled (tan, proper log scale), Petroleum Consumption seasonally adjusted by writer utilizing Census X13/X11 ARIMA (mild blue, proper log scale), and Gasoline Provided s.a. by writer (inexperienced, proper log scale), all 2021M11=0. NBER outlined peak-to-trough recession dates shaded grey. Hypothetical 2022H1 recession dates shaded mild blue. Supply: NHTSA, EIA through FRED, EIA STEO, NBER and writer’s calculations.
That is in distinction to different standard indicators, such because the Chicago Fed Nationwide Exercise Index. I plot CFNAI MA3 over the identical time interval as Determine 1 beneath, to indicate the contrasting evolution. Observe that the CFNAI MA3 didn’t breach the contraction threshold within the hypothetical 2022H1 interval.
Determine 2: CFNAI-MA3. If in growth, coming from above and falling beneath pink line, then coming into recession. If in recession and coming from beneath and rising above mild blue line, then coming into growth. NBER outlined peak-to-trough recession dates shaded grey. Hypothetical 2022H1 recession dates shaded mild blue. Supply: Chicago Fed through FRED, NBER.
Whereas I haven’t discovered SPAM gross sales numbers over time, I did discover month-to-month RV gross sales. Observe that the primary half of 2022 (truly by means of Might) was a bumper 12 months in gross sales, exceed file quantities in 2021 – for apparent causes.
Supply: Marucci (2023). Information by means of July 2023.
Now, if one wished to deduce incipient recession from the quickly declining RV gross sales, one might make an affordable argument (see my 2019 publish on utilizing RV gross sales to foretell recessions). Nevertheless, I might say that the distortions related to the pandemic make {that a} harmful proposition.
In sum: Should you nonetheless assume the 2022H1 recession name was affordable, then I’ve a bridge in NY to promote you.
