Business Cycle Indicators as of End-November

On the last day of the month, we see m/m personal income and consumption coming out at consensus. Here’s the picture of the key indicators followed by the NBER BCDC (of which personal income ex transfers and employment are key), along with SPGMI’s monthly GDP.

Figure 1: Nonfarm Payroll employment incorporating preliminary benchmark (bold dark blue), civilian employment (orange), industrial production (red), personal income excluding transfers in Ch.2017$ (bold green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP, 2nd release (blue bars), all log normalized to 2021M11=0. Source: BLS via FRED, BLS preliminary benchmark, Federal Reserve, BEA 2023Q3 2nd release incorporating comprehensive revisions, S&P Global/IHS Markit (nee Macroeconomic Advisers, IHS Markit) (11/1/2023 release), and author’s calculations.

Latest indications are for continued growth in inflation adjusted personal income ex-current transfers, and consumption spending. When the income and nonfarm payroll trends (even after accounting for preliminary benchmark revision in employment) are taken together, it is hard to see how a recession has hit as of October.

GDPNow as of today is for 1.8% q/q SAAR. We should have a read on monthly GDP tomorrow.

Note that the picture would look a little different using GDO.

Figure 2: Civilian employment from CPS adjusted to NFP concept (dark blue), Philadelphia Fed early benchmark measure of NFP (red), Philadelphia Fed coincident index for US (green), and GDO in bn.Ch.2017$ (blue bars), all log normalized to 2021M11=0. Source: BLS, Philadelphia Fed [1], [2], BEA 2023 Q3 2nd release, and author’s calculations.

While GDO registers slower growth than GDP (3.3% vs. 5.2%, q/q SAAR), all indicators (save industrial production) continue to rise through latest observations.