2022Q3 2nd Release, Alternative Measures Of Activity, And A Recession Of 2022H1?

Here’s GDP, GDO, and GDP+ through 2022Q3, and monthly indicators through 2022M10. I (still) don’t see a recession in 2022H1.

Figure 1: GDP (black), GDO (tan), and GDP+ (teal), all in bn.Ch.2012$, in logs, 2019Q4=0. Hypothesized 2022H1 peak-to-trough recession dates shaded lilac. Source: BEA 2022Q3 2nd release, Philadelphia Fed (11/30/2022), and author’s calculations.

Note that GDO exhibits a smaller decline in GDP for Q1 and Q2 than GDP. GDP+ (discussed here) exhibits positive growth throughout — although at a slower pace (remembering that since the series are shown in log terms, a flatter slope denotes slower growth rate). Keep in mind that GDP is likely to be revised over and over again (see here).

What about monthly indicators, as compared to vehicle miles traveled which has been posited as an indicator of recession? Some are shown below (conventional ones followed by NBER BCDC shown here).

Figure 2: GDP+ (blue bar), coincident index (teal), aggregate weekly hours adjusted to preliminary benchmark revision (dark red), monthly GDP from IHS Markit (pink), and vehicle miles traveled, s.a. (orange), all normalized to 2021M11=0. Hypothesized 2022H1 recession dates shaded lilac. Source: Philadelphia Fed (11/30/2022), Philadelphia Fed (11/23/2022), BLS, BLS preliminary benchmark revision, IHS Markit (11/1/2022), BTS via FRED, and author’s calculations.

Note that while vehicle miles traveled (VMT) as reported is below 2021M11 levels, given the times we live in, I’m not sure VMT is a reliable indicator of recession, if it ever was (see this post). In contrast, the other indicators — GDP+, Philly Fed coincident index, or aggregate hours — show little evidence of a recession occuring in 2022H1.

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