Underlying Economic and Labor Numbers through November Indicate Contracting or Flattening Fourth-Quarter 2020 GDP, Well Shy of Economic Recovery COVID-19 vaccines and improved treatment have helped to stabilize a still-disrupted level of economic activity, again well shy of a fundamental, full recovery, yet Pandemic issues, including new variants and vaccination controversies, continue. The Committee will closely monitor incoming information and assess the implications for monetary policy. Per the NAR Press Release, Existing-home sales retreated 2.4% in March to a seasonally adjusted annual rate of 4.44 million. Shadow Government Statistics or Shadowstats is a blog run by John Williams in which he re-analyzes government economic /unemployment published statistics in order to restate them. March 2023 Industrial Production, Manufacturing and Capacity Utilization showed meaningful downside benchmark revisions to previously reported activity, but continued in a third month of upturn in context of Federal Reserve regular overestimation of headline Industrial Production. Using the same data collection and calculation methodologies as the Bureau of Labor Statistics used in the 1980s, John Williams, the founder of ShadowStats, determined that headline inflation should be much higher than 5.4%, the latest June release. Part II --REGULAR ALERTS - Weekly Review: ECONOMY, MONEY SUPPLY AND INFLATION ALERTS: Broad Economy continues in downturn, amidst spiking Inflation. CPI-adjusted, Real Retail Sales declined by 1.04% (-1.04%) month-to-month in March 2023, down by 1.95% (-1.95%) year-to-year, with First-Quarter 2023 Real Retail Sales declining 0.30% (-0.30%) year-to-year, down for the fourth time in the last five quarters, otherwise gyrating with extreme volatility in recent monthly automobile sales. March 2023 Real New Orders for Durable Goods -- For fourteen consecutive quarters, through First-Quarter 2023, Real New Orders for Durable Goods (deflated by the Durable Goods PPI, and net of the volatile Commercial Aircraft orders), never has recovered its Third-Quarter 2019 Pre-Pandemic Peak activity. While the January 2021 Cass Freight Index Gained Year-to-Year for the Fourth Straight Month, It Also Contracted by 1.6% (-1.6%) from Two Years Ago India's Jobless Rate Hits a Three-Month High of 7.8%, CMIE Says. Alternate Gross Domestic Product Chart. In the Latest Four Months, Pandemic-Driven Unemployment Has Leveled Off Around 12%, Worst Since Before World War II, Other than for the Pandemic 1461] -- The 2020 Economic Collapse Remains Far from full Recovery. Where monthly jobs growth in the key Manufacturing, Retail Sales and Construction Sectors has turned flat-to-minus, the Leisure and Hospitality Sector showed continued strong, albeit slowing monthly growth, still holding shy by more than 2% (-2%) of ever recovering its pre-Pandemic level of activity. Noted frequently here and discussed subsequent to earlier FOMC Meetings (March 22nd was the last), little has changed: The Federal Reserves Federal Open Market Committee (FOMC) hiked the targeted Federal Funds Rate March 22nd by the expected 0.25%, to a 15-year high level of 5.00%, hoping still to induce an imminent Economic Recession, which otherwise already had been in play and deepening for some time, due to earlier rate hikes. Current liquidity and political risks and issues are intensified by potential Hyperinflation, long viewed by ShadowStats as the ultimate fate of the U.S. Dollar. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. March 2023 Housing Starts dropped year-to-year by a meaningful 17.2% (-17.2%) +/- 9.1%, with a 90% confidence interval, versus a revised 19.4% (-19.4%) [previously 18.4% (-18.4%)] in February. Near Record Growth of Currency in Circulation Foreshadows Inflation Risk FOR SUBSCRIBERS Beyond the pending monthly Commentary, graphs covering the latest numbers and most other economic, inflation and monetary detail, are available to you by e-mail, as part of your existing, regular subscription. Sales declined 22% from one year ago. The renewed monthly decline followed a 13.8% monthly jump in March, the first monthly gain since January 2022. Despite numerous, separate indications of the economy stalling or turning down anew (see the earlier GDP, Consumer Sentiment, New Orders for Durable Goods, Industrial Production, and Construction Spending), such broadly is ignored at present. The 2021 Financial Report is available here: https://www.fiscal.treasury.gov/reports-statements/financial-report/current-report.html -- ShadowStats will provide extended analysis in an updated Hyperinflation Commentary, which will post subsequent to the pending Commentary No. November Industrial Production and Its Dominant Manufacturing Sector Showed Deepening Year-to-Year Declines, While the Mining Sector Showed a Narrowed Annual Plunge, Thanks to Rising Oil Prices Please click on a chart or link to view details. That said, again, Fiscal Years 2021 and 2022 (FY 2021, FY 2022, FY 2023) circumstances and prospects have continued to deteriorate meaningfully, at an accelerating pace, from conditions at the end of FY 2020 (see the next paragraph), exploding anew into the still unfolding, disastrous FY 2023. An informal economy (informal sector or shadow economy) is the part of any economy that is neither officially taxed nor monitored. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). March 2023 Money Supply numbers and historic tables have been posted and graphed to the ALTERNATE DATA TAB (see the Menu Bar above), with more extensive analysis, graphs and coverage following in the DAILY UPDATE e-mails and in pending Commentary No. Headline March 2023 CPI-U annual inflation eased to 5.0%, from 6.0% in February, again, due to the relative easing of March 2023 energy prices against the oil and gasoline price spikes triggered by the year-ago by Russian invasion of the Ukraine. Shadowstats.comis a website that analyzes and offers alternatives to government economic statistics for the United States. Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. ShadowStats will re-address these numbers at that time. The CPI-U (consumer price index) is the broadest measure of consumer price inflation for goods and services published by the Bureau of Labor Statistics (BLS). Accordingly, the April 2021 to January 2023 growth rates here generally are shown against that February 2020 PPT, instead of year-to-year. Primers & Reports. Nov 26, 2013 Housing Starts delayed again. 1461 soon. That said, expanded Federal Government Deficit Spending continues, currently at the Debt Ceiling. Near-Term Financial-Market Turmoil Likely Is Far from Over, Given Renewed Deterioration in Economic Conditions, Fourth-Quarter 2020 Annualized Real GDP Growth of 4.0% Was as Expected, Slowing from the Record 33.4% Third-Quarter Pandemic Rebound
Again, full detail follows in the DAILY UPDATE e-mails and in pending No. That said, in practice, such should be a major economic consideration for the FOMC and the Administration, going forward, as they hike Interest Rates, reduce their Balance Sheet and look to break the Budget Deficit Federal Debt Ceiling. S Y S T E M I C .. R I S K -- FEDERAL RESERVE -(April 25th) Coverage of the March 2023 Money Supply and March 2023 Monetary Base follows in the MONEY SUPPLY AND MONETARY BASE Section, subsequent to this FOMC Section. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.. Nonetheless, January 2021 CPI-U Annual Inflation Hit a Soft, Ten-Month High of 1.4%, Boosted by Gasoline Prices, but Constrained by Mixed Food and Core Inflation Tourism Research Australia (TRA) provides statistics, research and analysis to support industry development and marketing activities for the Australian tourism industry. -- The University of Michigans full-month release of the April 2023 Consumer Sentiment reading held little changed at 63.5, against its initial estimate of 63.5, up from 62.0 in March 2023, holding shy by 37.1% (-37.1%)[previously by 38.6% (-38.6%) in March] of ever recovering its February 2020 pre-Pandemic peak level of 101.0. Accordingly, ongoing massive Fiscal and Monetary Stimuli will be needed, and likely will expand into 2024/2025, irrespective of the FOMCs pronounced tightening. As demonstrated in recent decades, FOMC stimulus likely will remain in play, as targeted by the FOMC, primarily, in order to prevent a collapse in the Banking System, or to magnify liquidity in the Banking System, which owns and controls the Federal Reserve, not to stimulate the Broad Economy, per se. Others: Consumer Liquidity, Depression, Money Supply. Risk of Hyperinflationary Economic Collapse Has Accelerated With Democrats Taking Control of Both the White House and Congress The SGS-Alternate GDP reflects the inflation-adjusted, or real, year-to-year GDP change, adjusted for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting. A Review-Preview of 2020 into 2024, it will incorporate all the latest economic details. Given mounting U.S. Banking System instabilities, the Federal Reserve continues to spike systemic liquidity with inflation-driving Money Supply creation, which exacerbates the inflation problem. A fully updated Money Supply Special Report will follow. -- In line with FOMC rate hikes, annual Payroll Growth has been slowing for the last fourteen months, from 5.3% in February 2022 to 2.7% in March 2023, suggestive of softening economic activity. [Posted May 1st, 1:00 a.m. (12) April 13th (Bureau of Labor Statistics). -- The Feds Balance Sheet Reduction formally began in June 2022 and should have begun to relieve some Money Supply pressures on Inflation at that time, in theory. He received an A.B. That also was in context of a deepening shortfall against its Pre-Pandemic Peak by 1.46% (-1.46%) in 1q2023, versus a 1.22% (-1.22%) shortfall in 4q2022. March 2023 activity versus the February 2020 Pre-Pandemic Trough for the newly redefined (post-May 2020) headline M1 (now including Savings Deposits, at about 92% of M2) was up by a headline 375.8%, albeit on a nonsensical, not comparable and inconsistent basis, down from 385.4% in February. Again, with the recovery from the Pandemic-driven collapse still flub-a-dubbing, continued extraordinary Monetary and Fiscal Stimulus likely will continue well into 2023, despite Financial-Market huffing and puffing to the contrary, and bi-furcated FOMC happy hype. Yet, the latest January 2023 Money Supply reporting still showed an actual increase in Basic M1, with an intensifying flight to systemic liquidity, as posted and reviewed in later paragraphs. 1454, No. Severely Negative Annual Revisions to Industrial Production Mean the Economy Was in Recession Well Before the Pandemic Hit Unprecedented in 40-Plus Years of Weekly Monetary Reporting: Money Supply M1 Jumped by 14.1% in the Last Two Weeks, in a Post-Election / COVID-19 Flight to Cash, From M2 to M1 March 2023 New Home Sales gained by a headline, statistically insignificant 9.6% +/- 15.2% month-to-month, with a statistically insignificant year-to-year decline of 3.4% (-3.4%) +/- 12.7% for this near-term unstable series. Bureau of Labor Statistics Reveals It Cannot Measure the CPI Properly, At Present Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. Please note with the ALTERNATE DATA Tab, that the Money Supply annual growth rates after February 2021 instead are against the February 2020 Pre-Pandemic Level not year-to-year (although both measures are plotted in the subscriber-only graphs). Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. -- Severe Systemic structural damage and distortions from the Pandemic-driven Shutdown continues to forestall meaningful Economic Rebound into 2023 and beyond, despite a reopened economy, in context of flummoxed Fiscal and Monetary Policies, and ever-evolving COVID-19 and related circumstances, and the continuing Russia-Ukraine conflict. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. [Posted May 1st, 1:00 a.m. In terms of quarter-to-quarter change, despite a sharp monthly decline in March 2023, those January and February auto sales pulled relative real 1q2023 activity up at an annualized quarterly pace of 3.10%, following respective consecutive annualized quarter-to-quarter declines of 3.29% (-3.29%) and 2.35% (-2.36%) in 4q2022 and 3q2022. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. Public Comment on Inflation Measurement & the Chained CPI-U, Update 2016Update 2015Hyperinflation 20142014 Second InstallmentDeficit Reality. CPI-adjusted, Real Retail Sales declined by 1.04% (-1.04%) month-to-month in March 2023, down by 1.95% (-1.95%) year-to-year, with First-Quarter 2023 Real Retail Sales declining 0.30% (-0.30%) year-to-year, down for the fourth time in the last five quarters, otherwise gyrating with extreme volatility in recent monthly automobile sales. Such Was the First Annual Gain in Freight Activity Since November 2018, When Excessive Fed Tightening Was Being Used to Constrain Consumer Liquidity and Domestic Economic Growth
Single-family auths flat in Sep/Oct. Shadow TUAS air vehicle The air vehicle system can be transported by two military wheeled vehicles and can be operated round-the-clock from unprepared sites by the 22-soldier crew. (17) March 30th (Bureau of Economic Analysis BEA, See Note 2) -- Third and Final Estimate of Fourth Quarter 2022 (4q2022) Gross Domestic Product (GDP) [The GDP Alternate Data Tab has been updated] - In continuing downside revision, the third-estimate of inflation-adjusted real 4q2022 GDP revised lower to an annualized quarter-to-quarter gain of 2.57%, in its third and final estimate, from its second estimate of 2.68%, and its initial estimate of 2.89%, versus 3.24% in 3q2022. (15) April 5th (Census Bureau, Bureau of Economic Analysis - BEA) - Following a record 2022 Real Annual Merchandise Trade Deficit, the January and February 2023 Deficits deepened successively to their worst readings since October 2022, but narrower than in First-Half 2022. Data source: Quarterly Informal Economy Survey (QIES) by World Economics, London. The aggregate Monetary Base often moves broadly on a parallel basis with the Money Supply, but it also can vary widely with the Money Supply, tied to the dominance of its movements triggered by Bank Reserves held by Federal Reserve Banks. "John" Williams was born in 1949. Liquidity-Strapped Consumers Move to Cash, Spiking Traditional Money Supply M1 Inflation. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%. -- In line with FOMC rate hikes, annual Payroll Growth has been slowing for the last fourteen months, from 5.3% in February 2022 to 2.7% in March 2023, suggestive of softening economic activity. ShadowStats contends that it is the extraordinary liquidity surge after the February 2020 collapse that is driving the inflation, and which needs to be worked down in order to bring the inflation circumstance under control. He believes the economy has collapsed, based upon his calculations on economic. 1461. Data downloads and the Inflation Calculator are Subscriber only. I also have, This material is provided under the ShadowStats.com. Where Commercial Aircraft account for about 32% of total orders, the remaining 68% includes everything else, ranging from automobiles to computers. Many segments and regions of the U.S. economy, and individual, personal circumstances have suffered, and continue to suffer severe structural damage from the shutdown, areas that likely will take years to recover fully. 1461. Adjusted for seasonal factors, the monthly decline was 3.8% (-3.8%), with the year-to-year drop at 3.6% (-3.6%). That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. Business-Cycle Conditions Are Collapsing Rapidly, Amidst an Extreme Acceleration in Inflation Revised year-to-year growth slowed to 0.88%, from 0.91% and an initial estimate of 0.96%, versus 1.94% in 3q2022. In the past, there have been various estimates of the economic impact and the size of shadow economy in Australia by organisations such as the Black Economy Taskforce External Link and the Australian Bureau of Statistics (ABS). Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. November New-Home Sales Collapsed by a Meaningful 11.1% (-11.1%) in the Month, On Top of Major Downside Revisions to Sales in Each of the Prior Three Months Separately, all as measured against Pre-Pandemic Troughs, traditional M2, which has not been redefined, was up by 34.7% in March 2023, versus readings 36.4% in February 2023 and 37.3% in January, while the broadest ShadowStats Ongoing-M3 Estimate notched lower in March to 30.2%, from 31.9% in both February and January 2023. Recessions are measured only from Peak-to-Trough, while Recoveries are measured from Trough-to-Regaining-the-Pre-Recession-Peak (timing not formally called by the NBER), which is far from being at hand, despite relative strength in some major numbers such as the GDP. (17) March 30th (Bureau of Economic Analysis BEA, See Note 2) -- Third and Final Estimate of Fourth Quarter 2022 (4q2022) Gross Domestic Product (GDP) [The GDP Alternate Data Tab has been updated] - In continuing downside revision, the third-estimate of inflation-adjusted real 4q2022 GDP revised lower to an annualized quarter-to-quarter gain of 2.57%, in its third and final estimate, from its second estimate of 2.68%, and its initial estimate of 2.89%, versus 3.24% in 3q2022. Revised year-to-year growth slowed to 0.88%, from 0.91% and an initial estimate of 0.96%, versus 1.94% in 3q2022. Including Commercial Aircraft, aggregate New Orders recovered pre-Pandemic levels in Third-Quarter 2020. Explored in the pending Commentary, the U.S. economy is and has been much weaker than advertised, not overheating, and the soaring inflation, which is much worse than headlined, again, primarily is being driven by the Feds excessive Money and Liquidity creation, not by an overheating economy, in a policy conundrum previously noted here by ShadowStats. Dan Heng builds: Sharpen that spear. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%. On Top of Downside Revisions, Declining November Real Retail Sales Showed Renewed Economic Deterioration 1461. With a further quarter-point rate hike expected out of this weeks May 2nd to 3rd FOMC Meeting, following nine consecutive FOMC Meeting rate hikes (0.25% at the last three meetings, 0.50% and 0.75% earlier), the U.S. Central Bank appears intent on using surging interest rates to drive the U.S. economy into the ground. Holding Physical Gold Protects the Purchasing Power of Dollar Assets, Irrespective of Any Near-Term Volatility in, or Manipulation of, Gold Prices, October 2020 Cass Freight Index Turned Positive Year-to-Year, Gaining 2.4% Against an Unusually Sharp, Unseasonable Decline the Year Before
-- In contrast, the ShadowStats Inflation-Corrected GDP Estimate (updated and graphed in full detail on the ALTERNATE DATA Tab) is corrected for the understatement of the headline inflation used in deflating Nominal GDP to Real GDP. The initial headline annualized quarterly estimate of inflation-adjusted First-Quarter 2023 Real Gross Domestic Product (GDP) showed doubly negative patterns of activity. 1461. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. ALTERNATE DATA TAB [See the Menu Bar above] provides the latest headline numbers and exclusive ShadowStats Alternate Estimates and related Graphs of CPI Inflation [April 13], GDP [April 27], Unemployment [April 7], Money Supply [April 25] and the ShadowStats Financial-Weighted U.S. Dollar [January 10]. (8) April 18th, (Census Bureau). (9) April 14th, (Federal Reserve Board). Real Annual Growth in New Orders for Durable Goods Turned Negative, Amidst Renewed Slowing in Commercial Aircraft Orders
Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. The 2020 Pandemic-Driven Recession was timed by the defining National Bureau of Economic Research (NBER), from Peak-to-Trough, as from February 2020 to April 2020 [2 months, the shortest on record] and from Fourth-Quarter 2019 to Second-Quarter 2020 [2 quarters]. Noted the by the U of M, Despite the increasingly negative news on business conditions heard by consumers, their short and long-run economic outlook improved modestly balanced by worsening assessments of personal finances due to higher expenses, reflecting the ongoing pain stemming from continued high prices. [Go to http://www.sca.isr.umich.edu for the full details.]. 2023 Shadow Government Statistics, Walter J. Williams. Yet, as discussed here frequently, the problem inflation largely is being driven by the FOMCs still explosive Money Supply and System Liquidity growth, not by an overheating economy. Despite Happy Headline Gains in January 2021 Real Retail Sales, Production and Construction, the Underlying Payroll Employment Numbers Tell the Opposite Story Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation. Further definition is provided in our CPI Glossary. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. Stock Indices Are At or Near All-Time Highs, Coming into the First Anniversary of the Pre-Pandemic Stock-Market Peaks and Subsequent Crashes There Is No V-Shaped Recovery (10) April 14th (Census Bureau, Bureau of Labor Statistics, St. Louis Fed, ShadowStats) [See the Opening Comments on the April 24th annual benchmark revisions to Retail Sales, which continue to show flat to negative annual contractions and quarterly contractions, net of inflation.] Gasoline prices having been in an upswing since January 2023, gaining 11.7% since December 2022, as of the just-released April 2023 monthly average [EIA]. It remains ShadowStats contention that the surging headline inflation is due to FOMC-triggered massive growth in the Money Supply and Monetary Liquidity, as reflected in the highly liquid Basic M1 (Currency plus Time Deposits / Checking Accounts), not due to an Overheating Economy. March 2023 Industrial Production, Manufacturing and Capacity Utilization showed meaningful downside benchmark revisions to previously reported activity, but continued in a third month of upturn in context of Federal Reserve regular overestimation of headline Industrial Production. The linear transformation of CPI tracks the $89 shadowstats series almost perfectly. Those details are posted and graphed on the Alternate Data Tab. Broadly, the aggregate Monetary Base had been in decline since hitting a peak in January 2021, but it has turned higher in the last several months. Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded, not reduced. Australia's Government Strengthens Grip With By-Election Win. Mind the Aftershocks: Post-Tantrum Market Calm Unnerves Traders . (II) - REGULAR ALERTS Again, as noted after the February 2023 rate hike, despite Fed Chairman Jerome Powells continued downplaying risks for the FOMCs hoped-for imminent Recession, which otherwise ostensibly is why he was raising rates, that downturn already was and is in play. Signals of renewed, faltering activity increasingly have taken on the mantle of a new Recession. U.S. Dollar. Services include customized forecasts and analyses of the general economy, presentations and consultations in-house for clients. Where Commercial Aircraft account for about 32% of total orders, the remaining 68% includes everything else, ranging from automobiles to computers. Where current inflationary pressures appear to be tied to excessive Monetary stimulus out of the Fed, not due to an overheating economy, still higher interest rates, now, would do little to contain inflation, while at the same time higher interest rates would continue to impair economic activity. From a revised -101.7 (previously -101.7) billion, from a revised -98.2 billion in December, its worst monthly showing since -112.4 billion in October 2022. The Committee remains highly attentive to inflation risks. 1461. Watch part 2 on hyperinflation: https://youtu.be/jzwU_UOwVMIUsing the same data collection and calculation methodologies as the Bureau of Labor Statistics us. For all readers, in general, if you have any questions or otherwise would like to communicate, please e-mail johnwilliams@shadowstats.com or call (707) 763-5786. 1461. SHADOWSTATS DAILY UPDATE - May 1st to May 3rd A major Subscriber-Only e-mail update is pending for later today.
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