Business Cycle Indicators as of June 27


Personal income and consumption for May were released last week, as well as the April manufacturing and trade industry sales figure.

Figure 1: Nonfarm payroll employment from May release (dark blue), Bloomberg consensus as of 6/27 for June nonfarm payroll employment (light 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. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (6/1/2021 release), NBER, and author’s calculations.

As suggested by retail sales ex. food (discussed in this post), manufacturing and trade industry sales pulled back, as did consumption, albeit in both cases moderately. Here’s an updated version of the graph from that post.

Figure 2: Retail sales excluding food services in 1982-84$ (teal), manufacturing and trade sales in 2012$ (black), and consumption in 2012$ (red), all in logs, 2020M02=0. Retail sales ex-food deflated using CPI-all. Source: Census, BEA, BLS, St. Louis Fed via FRED, and author’s calculations.

The consensus (Bloomberg) is for continued increase in nonfarm payroll employment in the June release (July 2nd), at 675,000. Assuming no revision to the May level, employment will still be 4.7% below peak levels (in log terms).

Nowcasts for Q2: Atlanta GDPNow at 8.3% (6/25), NY Fed at 3.4% (6/25), and IHS-Markit at 8.1% (6/25).