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Business Cycle Indicators, November 17

Summary:
With October industrial production  reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/17 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (11/2 release), NBER, Bloomberg, and author’s calculations. Industrial production rose 1.1% (not annualized) much in line with Bloomberg’s consensus 1.0%. Hence for data through October (September for monthly GDP, and August for sales), we have evidence of continued

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With October industrial production  reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators:

Business Cycle Indicators, November 17

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/17 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (11/2 release), NBER, Bloomberg, and author’s calculations.

Industrial production rose 1.1% (not annualized) much in line with Bloomberg’s consensus 1.0%. Hence for data through October (September for monthly GDP, and August for sales), we have evidence of continued growth.

Retail sales, also reported today, were under consensus. Figure 2 shows retail sales and food services, as well as retail sales, both in nominal terms. Both have slowed their growth, to 3.0% and 3.5% respectively (log terms).

Figure 2: Retail sales and foods services (blue), and retail sales ex. food services (brown), both in millions $, not annualized. Source: BEA via FRED.

Food service sales have slowed to essentially zero growth (-1.5% annualized) far below peak: 16% (log terms). Adjusting by the CPI-food away from home index, the decline is 19% (and declining at an annualized 4.8%).

Business Cycle Indicators, November 17

Figure 3: Food services sales (blue), “real” food service sales (brown), both in logs, 2020M02=0. Food service sales deflated by CPI index for urban food away from home. Source: BEA, BLS, author’s calculations.

I expect the food services sector to decelerate in the next monthly employment report, if not actually decline.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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