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Business Cycle Indicators as of 3 March

Summary:
The goods production side of the economy continues to recover, and monthly GDP comes close to October 2010 levels. Nonfarm payroll employment as implied by the Bloomberg survey is for a slight increase of 182K. Some key indicators followed by the NBER Business Cycle Dating Committee. Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 3/3 for February nonfarm payroll employment (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (3/1/2021 release), NBER, and author’s

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The goods production side of the economy continues to recover, and monthly GDP comes close to October 2010 levels. Nonfarm payroll employment as implied by the Bloomberg survey is for a slight increase of 182K. Some key indicators followed by the NBER Business Cycle Dating Committee.

Business Cycle Indicators as of 3 March

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 3/3 for February nonfarm payroll employment (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (3/1/2021 release), NBER, and author’s calculations.

So, economic activity did actually decline toward the end of 2020, as many had feared.

We also got information regarding employment today, in the form of the ADP release. Private nonfarm payroll employment grew, suggesting continued recovery in the official BLS series.

Figure 2: Private nonfarm payroll employment – BLS (blue), Bloomberg consensus as of 3/3 (teal square), private nonfarm payroll employment – ADP (red). Source: BLS, ADP, Bloomberg, and author’s calculations.

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

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