Business Cycle Indicators at the Start of February

IHS-Markit’s monthly GDP is out, with a 0.1% m/m increase in December. Here are some key indicators followed by the NBER BCDC.

Figure 1: Nonfarm payroll employment (dark blue), 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. NBER defined recession dates, peak-to-trough, shaded gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (2/1/2022 release), NBER, and author’s calculations.

IHS-Markit notes in part:

Monthly GDP rose 0.1% in December following a 0.7% decline in November (revised from -0.8%). The modest increase in December reflected a large increase in nonfarm inventory-building that was nearly offset by a large decline in domestic final sales.

On an annualized basis, GDP fell rose 1.8% in December, but final sales fell so as to contribute -7.3 percentage points of that 1.8 percentage growth. (Inventory accumulation accounted for 9.1 percentage points!)

For context, here’s IHS-Markit’s estimate of monthly GDP and the BEA’s advance estimate for Q4, discussed by Jim in his post last week.

Figure 2: GDP from BEA (blue bar), and from IHS-Markit (black line), both billions Ch.2012$, SAAR. Source: BEA (advance Q4 release), and IHS-Markit (February 1, 2022). 

Today’s GDPNow estimate is for 0.1% growth (q/q SAAR) in Q1.