With consumption (nominal at 0.2% vs.0.4% consensus) and personal income May releases, we have the following snapshot of some key indicators followed by the NBER BCDC.

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for NFP (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, peak-to-trough, shaded gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (6/1/2022 release), NBER, and author’s calculations.

Three of four indicators for which we have May data are still rising, while real consumption is decreasing. The drop in consumption of 0.2% m/m is surprising, but not unprecedented; it fell 1.4% m/m in December of 2021. Here’s a decomposition of real consumption, and changes in real consumption.

Figure 2:

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

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