Business Cycle Indicators as of November 25th

With October personal income and September manufacturing and trade sales reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators:

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/25 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (11/2 release), NBER, Bloomberg, and author’s calculations.

The picture is consistent with growth at a greatly decelerated rate. The Bloomberg consensus for November employment growth rate is 4.4% (annualized, log terms), compared to the actually recorded October rate of 5.4% (annualized). I don’t think this incorporates the latest information regarding unemployment claims. In addition, some high frequency indicators (Tedeschi) suggest a negative growth rate for November.

If there is an incipient downturn at year’s end, it hasn’t shown up in the conventional indicators. Personally, give the Covid-19 surge, administration and legislative branch obstructionism (if not scorched earth sabotage), I am a bit pessimistic.