The 2020 Pandemic-Driven Recession was timed by the defining National Bureau of Economic Research (NBER), from Peak-to-Trough, as from February 2020 to April 2020 [2 months, the shortest on record] and from Fourth-Quarter 2019 to Second-Quarter 2020 [2 quarters]. (2) April 27th (Bureau of Economic Analysis), also see Note 17. While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms . ShadowStats is Williams' attempt to provide an alternative to the official consumer price index (CPI), which he views as a flawed measure of what members of the general public have in mind when. An informal economy (informal sector or shadow economy) is the part of any economy that is neither officially taxed nor monitored. That said, the initial estimate of the theoretical GDP-equivalent 4q2022 Gross Domestic Income (GDI) showed an annualized quarterly contraction of 1.14% (-1.14%), versus an annualized gain of 3.76% in 3q2022, with the more traditional Gross National Product (GNP) gaining at an initial annualized 2.38% in 4q2022 GDP, versus 2.44% in 3q2022. THIS WEEKS PENDING DAILY UPDATE COVERAGE OF FOMC AND ECONOMIC ACTIVITY (Monday, May 1st to Friday, May 5th): (Monday) March 2023 Construction Spending will be covered Tuesday, (Late Wednesday and Thursday) May 2023 FOMC Meeting, (Thursday) March 2023 Real Merchandise Trade Deficit, (Friday) April 2023 Employment and Unemployment. To ensure that our results are as robust as possible we use multiple sources to estimate its overall size, including data from the ABS, the Black Economy Taskforce (BETF), and the Australian Criminal Intelligence Commission (ACIC). -- Headline Fourth-Quarter 2022 GDP inflation (Implicit Price Deflator [IPD}) came in at a revised third estimate of an annualized pace of 3.92% (previously 3.93% and 3.51%), against an unrevised 4.36% in 3q2022, and up by an unrevised year-to-year 6.41% (initially 6.30%), versus an unrevised 7.15% in Third-Quarter 2022, which remained at a 42-year high, outside of the recent inflation spike. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. Separately, all as measured against Pre-Pandemic Troughs, traditional M2, which has not been redefined, was up by 34.7% in March 2023, versus readings 36.4% in February 2023 and 37.3% in January, while the broadest ShadowStats Ongoing-M3 Estimate notched lower in March to 30.2%, from 31.9% in both February and January 2023. -- Extended Fed coverage will follows in the later SYSTEMIC RISK SECTION -- FEDERAL RESERVE, with an updated story following the pending May 3rd FOMC coverage, as well as a comprehensive review of Federal Reserve Monetary Policies and Federal Government Fiscal Policies in pending Commentary No. Holding Physical Precious Metals Remains the Best Hedge Against Coming Inflation and Market Turmoil, Deepening Economic Woes and Soaring Inflation Ahead March 2023 Housing Starts dropped year-to-year by a meaningful 17.2% (-17.2%) +/- 9.1%, with a 90% confidence interval, versus a revised 19.4% (-19.4%) [previously 18.4% (-18.4%)] in February. Data source: Quarterly Informal Economy Survey (QIES) by World Economics, London. Discussions on the inflation threat and re-accelerating money growth are found in Special Hyperinflation Commentary, Issue No. That said, the aggregate series quarterly sales, have been in annual decline for each of the last seven quarters, up through the current 1q2023, in an otherwise deepening housing recession. Underlying headlines of better-quality U.S. economic numbers, reviewed here in Part II [see Points (1) to (18)], suggest that the United States has been in Recession since First-Quarter 2022, allowing for the political games played with the Strategic Petroleum Reserve depletion, which otherwise also accounted for the headline boost in Second-Half 2022 (Third- and Fourth-Quarter 2022) GDP growth. S Y S T E M I C .. R I S K -- FEDERAL RESERVE -(April 25th) Coverage of the March 2023 Money Supply and March 2023 Monetary Base follows in the MONEY SUPPLY AND MONETARY BASE Section, subsequent to this FOMC Section. Many segments and regions of the U.S. economy, and individual, personal circumstances have suffered, and continue to suffer severe structural damage from the shutdown, areas that likely will take years to recover fully. -- In line with FOMC rate hikes, annual Payroll Growth has been slowing for the last fourteen months, from 5.3% in February 2022 to 2.7% in March 2023, suggestive of softening economic activity. Latest Weekly Money Supply M1 Jumped an Unprecedented 72.3% Year-to-Year Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. Bureau of Labor Statistics Reveals It Cannot Measure the CPI Properly, At Present 1461] -- The 2020 Economic Collapse Remains Far from full Recovery. Full-Year 2020 Existing- and New-Home Sales Were Highest Since 2006
Shadowstats debunked. -- The Feds Balance Sheet Reduction formally began in June 2022 and should have begun to relieve some Money Supply pressures on Inflation at that time, in theory. The Fed will release the headline April 2023 Money Supply and Monetary Base data at 1:00 p.m. The best Honkai: Star Rail Trailblazer build is all about . That said, more commonly, sharp annual declines in recent months have tended to be statistically significant, but not the month-to-month changes. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.. The aggregate Monetary Base often moves broadly on a parallel basis with the Money Supply, but it also can vary widely with the Money Supply, tied to the dominance of its movements triggered by Bank Reserves held by Federal Reserve Banks. The projected continuous rise of the debt-to-GDP ratio indicates that current policy is unsustainable. Allowing for the 2021 Unfunded Liabilities, reflected here, that Debt-to-GDP ratio already was 552% at the end of Fiscal Year 2021. GENERAL COVERAGE: Again, on the Inflation front, it is the bloated Money Supply and gasoline price disruptions that are driving or affecting higher inflation, at present, not an overheating economy. Current employment/ economic conditions will be assessed and reviewed shortly in the pending No. Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels We thank Cass Information Systems for sharing their survey information. -- Extended Fed coverage will follows in the later SYSTEMIC RISK SECTION -- FEDERAL RESERVE, with an updated story following the pending May 3rd FOMC coverage, as well as a comprehensive review of Federal Reserve Monetary Policies and Federal Government Fiscal Policies in pending Commentary No. Those details are posted and graphed on the Alternate Data Tab. ALTERNATE DATA TAB [See the Menu Bar above] provides the latest headline numbers and exclusive ShadowStats Alternate Estimates and related Graphs of CPI Inflation [April 13], GDP [April 27], Unemployment [April 7], Money Supply [April 25] and the ShadowStats Financial-Weighted U.S. Dollar [January 10]. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent. The latest Economic and Inflation releases were covered earlier in the Opening Section of this DAILY UPDATE. Reporting
Noted frequently here and discussed subsequent to earlier FOMC Meetings (March 22nd was the last), little has changed: The Federal Reserves Federal Open Market Committee (FOMC) hiked the targeted Federal Funds Rate March 22nd by the expected 0.25%, to a 15-year high level of 5.00%, hoping still to induce an imminent Economic Recession, which otherwise already had been in play and deepening for some time, due to earlier rate hikes. Pandemic-Disrupted U.3 Unemployment Effectively Was 9.0% in November 2020, Not the Headlined 6.7% If you are a Subscriber and are not receiving, but would like to receive those e-mails, please send a note to johnwilliams@shadowstats.com along with the desired e-mail address. Australia's Government Strengthens Grip With By-Election Win. New Numbers Show Production Peaked in August 2018 and Entered Protracted Decline, February 2020 Pre-Pandemic Peak Was 1.11% (-1.11%) Below the Pre-Great Recession Peak If you are not a Subscriber, and wish to be, see the next paragraph. As Tim notes, this is a gobsmacking error. November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity Payroll-Employment Benchmark Revisions Showed a Deepening, Accelerating Decline into an April 2020 Trough, With Renewed Deterioration at Present; Recovery from the Pandemic Shutdown Has Stalled and/or Is Regressing (15) April 5th (Census Bureau, Bureau of Economic Analysis - BEA) - Following a record 2022 Real Annual Merchandise Trade Deficit, the January and February 2023 Deficits deepened successively to their worst readings since October 2022, but narrower than in First-Half 2022. On Top of Downside Revisions, Declining November Real Retail Sales Showed Renewed Economic Deterioration Revised year-to-year growth slowed to 0.88%, from 0.91% and an initial estimate of 0.96%, versus 1.94% in 3q2022. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. (7) April 20th (National Association of Realtors NAR). Republishing our charts: Permission, Restrictions and Instructions (includes important requirements for successful hot-linking) (16) April 3rd (Census Bureau) February 2023 Real Construction Spending) - Despite the usual upside revisions to the prior two months of reporting, February 2023 Real Construction Spending showed its 17th straight month of year-to-year decline (down by 9.5% (-9.5%) from February 2022) [see Note (4)], with First-Quarter 2023 activity track for its fourth consecutive quarter-to-quarter decline, and its sixth consecutive quarterly year-to-year decline. That circumstance is reviewed in pending ShadowStats Benchmark Commentary No. Primers & Reports. 1454, No. [Again, the E-Mail Updates are available to you as part of both new and existing regular subscription; just request it by e-mail from johnwilliams@shadowstats.com .]. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. For the most-liquid Basic M1 Money Supply measure in March 2023, dollar levels and growth levels moved higher against the Pre-Pandemic Trough, still suggestive of massive mounting, not easing inflation pressures. Dan Heng builds: Sharpen that spear. (11) April 14th (CassInfo.com) The March 2023 Cass Freight Index release noted that The shipments component of the Cass Freight Index fell 1.0% m/m in March as freight markets continue to work through an extended soft patch. That monthly decline of 1.0% (-1.0%) was not seasonally adjusted, with a related unadjusted year-to-year drop of 4.0% (-4.0%). Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. Near-Term Financial-Market Turmoil Likely Is Far from Over, Given Renewed Deterioration in Economic Conditions, Fourth-Quarter 2020 Annualized Real GDP Growth of 4.0% Was as Expected, Slowing from the Record 33.4% Third-Quarter Pandemic Rebound
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