Business Cycle Indicators as of August 2

IHS-Markit (nee Macroeconomic Advisers) released monthly GDP today. The July employment situation will be released this Friday.

Figure 1: Nonfarm payroll employment from June release (dark blue), Bloomberg consensus as of 8/2 for July nonfarm payroll employment (light 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 shaded gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (8/2/2021 release), NBER, and author’s calculations.

Both Monthly GDP and personal income excluding current transfers growth have stalled out at prior-peak levels. Relative to the NBER peak in 2020M02, employment continues to be the laggard, down 4.5% (log terms). If nonfarm payroll (NFP) in July rises as forecasted by Bloomberg consensus by 900K, it’ll still be down by 3.9%.

Contributions to June’s GDP growth are shown in the table below.

Final sales growth outstripped GDP growth, as in the quarter overall (see this post), hence the -2.1% (SAAR) contribution from inventory decumulation. Net exports have been exerting a drag in the last two  months, as well.