Economy

Can we use national employment to nowcast Wisconsin employment? This endeavor is somewhat complicated by the pandemic. With DWD’s release today, we can evaluate the fit of the model. Figure 1: Wisconsin NFP employment, August release (bold blue), July (light blue), nowcast based on US NFP 2021M07-2024M06 (red), +/- 1 std error bands. Source: BLS,

As of August, incorporating latest capacity utilization and production data, I’m tempted to say no, even incorporating at face value the preliminary benchmark revision to employment. Figure 1: Manufacturing production (blue, left scale), implied employment from preliminary benchmark (tan, left scale), aggregate hours (green, left scale), and real valued added (red), all in logs, 2021M07=0,

Ad hoc time series analysis. The 30 year mortgage rate and 10 year Treasury constant maturity yield comove over the past 8 years. A Johansen maximum likelihood test (constant in cointegrating equation, in VAR, 4 lags of differences) rejects the no  cointegration null using the Trace statistic (also only 1 cointegrating vector, so both series

At the press conference for today’s FOMC meeting, there was a lot of talk about how the 50bps drop was dramatic. That focused on the change, rather than the level…Consider what some measures of the Taylor rule (which refers to the level of the Fed funds rate) indicate. Source: Atlanta Fed, accessed 18 Sep 2024.

From the Fed today: Figure 1: GDP (bold black), Summary of Economic Projections median (inverted light green triangle), GDPNow as of 9/18 (light blue square),  NY Fed nowcast as of 9/13 (red triangle), FT-Booth as of 9/14 (blue square), and August median SPF (tan), all in bn.Ch.2017$ SAAR. Levels calculated by iterating growth rate on

Apparently some news: Source: TradingEconomics.com at 1:20 CT. Source: TradingEconomics.com at 1:24 CT.

With US HICP out today: Figure 1: Instantaneous inflation (T=12, a=4) for CPI (bold blue), PCE deflator (brown), and HICP (green), per Eeckhout (2023). Tan dashed horizontal line at 2% target for PCE deflator, blue dashed line corresponding target for CPI, HICP, assuming 0.5 ppts difference. Source: BLS, BEA, Economic Commission, and author’s calculations. A

From the article (published 9/10), two key graphs: So… …with inflation nearly down to target levels while signs of economic slowing mount, the Fed can afford to start reversing its exceptional monetary tightening. So in today’s post, Kamin makes the case for 0.5% cut: If the economy is close to balance and inflation likely to

Goldman Sachs tracking 2.8%. Figure 1: GDP (bold black), GDPNow as of 9/17 (light blue square), Goldman  Sachs tracking as of 9/17 (pink circle), NY Fed nowcast as of 9/13 (red triangle), FT-Booth as of 9/14 (blue square), and August median SPF (tan), all in bn.Ch.2017$ SAAR. Source: BEA 2024Q2 2nd release, Atlanta Fed, NY

From Motio Research, August 2024: Source: MotioResearch.