Monthly GDP and Other Business Cycle Indicators

With the release of IHS-Markit monthly GDP, we have the following graph of key indicators noted by NBER BCDC.

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for April NFP as of 5/2 (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) (5/2/2022 release), NBER, and author’s calculations.

The monthly GDP number is of interest since it provides some insight into the trajectory of overall output, that is down.

Figure 2: GDP as released by BEA (Q1 advance) (blue bar), and monthly GDP (black line), both in bn. Ch.2012$ SAAR. Source: BEA (Q1 advance) and IHS-Markit (May 2, 2022).

There are several tracking measures of GDP. IHS-Markit (formerly Macroeconomic Advisers) is perhaps one of the longest reported. The Chicago Fed also reports a monthly GDP growth rate (Brave-Butters-Kelley index). Here’re the two series compared for the same period.

Figure 3: Monthly GDP from IHS-Markit (black line), and from Chicago Fed (red line), m/m annualized, %. Source: IHS-Markit (May 2, 2022), and Chicago Fed via FRED.

A first reading on the trajectory of the economy in Q2 comes on Friday with the employment release (+400K per Bloomberg consensus).