Along with the IHS-Markit (Macroeconomic Advisers) monthly GDP for September, we have the following picture of some key indicators tracked by the NBER Business Cycle Dating Committee.
Figure 1: Non-agricultural wage employment (dark blue), Bloomberg consensus at 10/4 for NFP (blue +), civilian employment (orange), industrial production (red), personal income excluding transfers in Ch.2012$ (green), industry and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue) and monthly GDP in Ch.2012$ (pink), official GDP (blue bars), all logarithmic normalized to 2021M11=0. Lilac shading indicates dates associated with a hypothetical first-half recession. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (née Macroeconomic Advisers) (published 4/10/2022) and author’s calculations.
Note that monthly GDP rose sharply in September. Of IHS Markit:
Monthly GDP rose 0.8% in August after rising 0.2% in July. The latter was revised downwards by 0.2 percentage point. August’s increase was driven by strong increases in non-farm inventory investment and net exports. Final sales to domestic buyers were
mostly flat in August. The sharp increase in inventory investment in August is likely to reverse in September, as inventories (excluding motor vehicles and parts), by our estimate, were already somewhat overstretched heading into August. GDP and other indicators seem to be at odds; however, if we look at GDO, they seem more consistent.
Figure 2: Nonfarm payroll employment (dark blue), 10/14 Bloomberg consensus (blue+), civilian employment (orange), 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), gross domestic production, GDO (blue bars), all logarithms normalized to 2021M11=0. Lilac shading indicates dates associated with a hypothetical first-half recession. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (née Macroeconomic Advisers) (published 4/10/2022) and author’s calculations.
For more information on GDP vs. GDO and other related metrics, see this Publish since the beginning of the month, and discussion of the annual GDP revision, here.
With consumption, employment and production measures rising throughout the first half of the year and a sideways trend in the GDO, it does not seem likely that the first half of the year will be declared a recession, defined as a generalized decline and persistence of economic activity.