Enterprise Cycle Indicators as of end-January 2023 and Q1 Nowcasts

With the discharge of December 2022 consumption and private earnings, and November actual manufacturing and commerce business gross sales, plus This fall GDP, we now have the next image of enterprise cycle indicators adopted by the NBER Enterprise Cycle Relationship Committee, together with IHS Markit month-to-month GDP:

Determine 1: Nonfarm payroll employment, NFP (darkish blue), Bloomberg consensus as of 1/27 (blue +), civilian employment (orange), industrial manufacturing (pink), private earnings excluding transfers in Ch.2012$ (inexperienced), manufacturing and commerce gross sales in Ch.2012$ (black), consumption in Ch.2012$ (gentle blue), and month-to-month GDP in Ch.2012$ (pink), GDP (blue bars), all log normalized to 2021M11=0. Q3 Supply: BLS, Federal Reserve, BEA, by way of FRED, IHS Markit (nee Macroeconomic Advisers) (1/3/2023 launch), Bloomberg (as of 1/27) and creator’s calculations.

Whereas GDP grew at 2.9% Q/Q SAAR in quarter 4, exceeding Bloomberg consensus (2.6%) (see Jim’s submit), the rise in inventories factors to a downside in 2023Q1. Together with the slowdown in consumption, and weaker exports in December (not proven), we now have a particular slowdown in Q1 nowcasts/monitoring estimates.

Determine 2: GDP (daring black), WSJ December survey imply (darkish blue), GDPNow (pink sq.), Goldman Sachs (teal sq.), IHS Markit/S&P World (pink triangle), all in bn. Ch.2012$ SAAR. Supply: BEA 2022Q4 advance, WSJ, Atlanta Fed (1/27), Goldman Sachs (1/27), and IHS Markit (1/27), and creator’s calculations.

IHS Markit monitoring signifies 1.6% decline in Q1 (Q/Q SAAR).