[See the earlier headline Payroll discussions and later FOMC comments.] 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 Monthly Annual and Post-Pandemic Payroll Declines Have Stabilized Around Minus Six-to-Seven Percent for the Last Eight Month, Weakest Showing Since 1946 While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation . The Employment series is based on actual Payroll Taxes paid by Employers, as opposed to irregular (Pandemic-induced, telephone-only) impaired surveys of the Public as to Unemployment. 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. An Increasing Number of Unemployed People Were Misclassified as Employed; Corrected December Unemployment Would Have Jumped, Instead of Holding at 6.7% (18) March 21st to 22nd (FOMC). A fully updated Money Supply Special Report will follow. Consider -- Despite significant Recovery off the Pandemic-Driven Economic Trough of April 2020, the February 2023 Payroll Employment has recovered its February 2020 Pre-Pandemic/ Recession Peak, despite indications of a renewed slowdown. We thank Cass Information Systems for sharing their survey information. -- In contrast, the ShadowStats Corrected Alternate-GDP estimate, adjusted for the continual understatement of headline GDP Inflation, and the corresponding continual overstatement of growth in the Real GDP, showed a corrected 1q2023 real annualized quarterly contraction of 0.98% (-0.98%), against a 0.50% 4q2022 gain, with an annual contraction of 0.49% (-0.49%) in 1q2023, against an annual drop of 1.16% (-1.16%) in 4q2022. Walter J. 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. 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]. Separately, extended full coverage and graphs of both the Money Supply and Monetary Base and their components follows in the pending Subscriber-only Daily Update E-mail. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. In summary, Shadow Stats constructed their alternative measure by taking a 5.1% difference between CPIU and CPIURS (the BLS's retroactive adjustment) and misinterpreted it as an ANNUAL difference when it was in fact a CUMULATIVE difference. (I) - BOTTOM LINE COVERAGE: A ninth, consecutive FOMC Meeting Interest Rate hike is expected Wednesday, yet the U.S. Economy already is in intensifying Recession. Narrowing Annual Declines in October and November Payrolls Stalled at 6.0% (-6.0%), But the Year-to-Year Drop in December 2020 Payrolls Deepened to 6.2% (-6.2%) Consumer Inflation: Official vs ShadowStats - BMG Williams told David Lin, anchor for Kitco News, that the true headline . Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation. Government will not lift welfare payments despite recommendation - as 1461. Details and related graphs follow in the next Subscriber e-mail, with extended review and coverage of this Fed-acknowledged regular pattern of initial upside reporting and later downside benchmark revisions to this series, as otherwise pending in Commentary No. The U.S. banking system is sound and resilient. 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. First-Quarter 2021 GDP Increasingly Is Set for a Relapsing Quarterly Contraction October Industrial Production Continued in L-Shaped Recovery, With Annual Change Flattening Out in Negative Territory Inflation remains elevated. Those numbers are adjusted for inflation, using the Construction Producer Price Index. (4) April 25th (Federal Reserve Board, ShadowStats) -- Headline U.S. March 2023 Money Supply and Monetary Base details showed a continuing creation of, or a shift or flight to liquidity, all of which tends to fuel inflation. The aggregate Real Annual Merchandise Trade Deficit for 2022 was unrevised at -1,320.2 Billion Chained (2012) Dollars, again, its worst showing in history. Is ShadowStats legit? : AskReddit Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. 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. A similar pattern is likely with the Census Bureaus May 1st release of March 2023 nominal Construction Spending, given the activity patterns and related needed inflation-adjustments already in play. ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. Ukraine Latest: War Casts Shadow Over Votes in Bulgaria, Finland. Adjusted for seasonal factors, the monthly decline was 3.8% (-3.8%), with the year-to-year drop at 3.6% (-3.6%). The growth of the shadow economy can set off a destructive cycle. In the charts to the right we show two SGS-Alternate CPI estimates: One based on the pre-1990 official methodology for computing the CPI-U, and the other based on the methodology which was employed prior to 1980. 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 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. GENERAL COVERAGE: Again, on the Inflation front, it is the bloated Money Supply and gasoline price disruptions that are driving or affecting higher inflation, at present, not an overheating economy. THIS WEEKS PENDING DAILY UPDATE COVERAGE OF FOMC AND ECONOMIC ACTIVITY (Monday, May 1st to Friday, May 5th): (Monday) March 2023 Construction Spending will be covered Tuesday, (Late Wednesday and Thursday) May 2023 FOMC Meeting, (Thursday) March 2023 Real Merchandise Trade Deficit, (Friday) April 2023 Employment and Unemployment. -- Despite recent GDP Benchmark Revisions and current gimmicked reporting, key Economic Series show not only that the Pandemic-driven Economic Collapse was worse than headlined, but also that the still-unfolding Recovery has been much weaker than indicated. He received an A.B. 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. While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms . The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 As Tim notes, this is a gobsmacking error. Momentum of Fourth-Quarter Data Suggests a First-Quarter 2021 GDP Contraction, As the Pandemic and Political Tumult Take on Negative New Dimensions HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). ShadowStats will re-address these numbers at that time. The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. Although I am known formally as Walter J. Williams, my friends call me John.For 30 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting. 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. Further background on the SGS-Alternate CPI series is available in our Public Comment on Inflation Measurement.
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