The survey shows, among many measures, the following median expectations:
Real GDP: (annual average level)
full-year 2019: 2.3%
full-year 2020: 1.8%
full-year 2021: 2.0%
full-year 2022: 2.0%
Unemployment Rate: (annual average level)
for 2019: 3.7%
for 2020: 3.7%
for 2021: 3.7%
for 2022: 3.9%
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Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 12.8%, 18.1%, 20.8%, 22.6%, and 25.1% for each of the quarters from Q4 2019 through Q4 2020, respectively.
As well, there are also a variety of time frames shown (present quarter through the year 2028) with the median expected inflation (annualized) of each. Inflation is measured in Headline and Core CPI and Headline and Core PCE. Over all time frames expectations are shown to be in the 1.5% to 2.3% range.
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I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
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The Special Note summarizes my overall thoughts about our economic situation
For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.
However, I do think the measures are important and deserve close monitoring and scrutiny.
Below are three long-term charts, from the Doug Short site’s ECRI update post of November 15, 2019 titled “ECRI Weekly Leading Index Update.” These charts are on a weekly basis through the November 15, 2019 release, indicating data through November 8, 2019.
This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:
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This last chart depicts, on a long-term basis, the WLI, Gr.:
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I post various economic indicators and indices because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
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The Special Note summarizes my overall thoughts about our economic situation
The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system. Its reading as of the November 7, 2019 update (reflecting data through November 1, 2019) is -1.324.
Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.
Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).
Here are summary descriptions of each, as seen in FRED:
The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.
The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.
For further information, please visit the Federal Reserve Bank of Chicago’s web site:
Below are the most recently updated charts of the NFCI and ANFCI, respectively.
The NFCI chart below was last updated on November 14, 2019 incorporating data from January 8, 1971 through November 8, 2019, on a weekly basis. The November 8 value is -.76:
The ANFCI chart below was last updated on November 14, 2019 incorporating data from January 8, 1971 through November 8, 2019, on a weekly basis. The November 8 value is -.63:
I post various indicators and indices because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
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The Special Note summarizes my overall thoughts about our economic situation
Throughout this site there are many discussions of economic indicators. At this time, the readings of various indicators are especially notable. This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.
While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction. As seen in the November 2019 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 2.1% GDP growth in 2019 and 1.7% GDP growth in 2020. However, there are other broad-based economic indicators that seem to imply a weaker growth rate.
As well, it should be remembered that GDP figures can be (substantially) revised.
Charts Indicating U.S. Economic Weakness
Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:
Total Federal Receipts
“Total Federal Receipts” growth continues to be intermittent in nature since 2015. As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.
“Total Federal Receipts” through October had a last monthly value of $245,520 Million. Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value -2.8%, last updated November 13, 2019:
source: U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 13, 2019: https://fred.stlouisfed.org/series/MTSR133FMS
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The Chicago Fed National Activity Index (CFNAI)
A broad-based economic indicator that has been implying weaker growth or mild contraction is the Chicago Fed National Activity Index (CFNAI).
source: Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 28, 2019: https://fred.stlouisfed.org/series/CFNAI
The CFNAI-MA3 (CFNAI three-month moving average) with current reading of -.24:
source: Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis; October 28, 2019: https://fred.stlouisfed.org/series/CFNAIMA3
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The Aruoba-Diebold-Scotti Business Conditions Index (ADS Index)
Another broad-based economic indicator that seems to imply a weaker recent growth rate is the Aruoba-Diebold-Scotti Business Conditions Index (ADS Index.)
Below is a chart of the index from December 31, 2007 through November 2, 2019, with a value of -.1673, as of the November 7 update:
I have written extensively concerning unemployment, as the current and future unemployment issue is of tremendous importance.
The consensus belief is that employment remains robust, citing total nonfarm payroll growth and the current unemployment rate of 3.6%. However, my analyses continue to indicate that the conclusion that employment is strong is incorrect. While the unemployment rate indicates that unemployment is (very) low, closer examination indicates that this metric is, for a number of reasons, highly misleading.
My analyses indicate that the underlying dynamics of the unemployment situation remain exceedingly worrisome, especially with regard to the future. These dynamics are numerous and complex, and greatly lack recognition and understanding, especially as how from an “all-things-considered” standpoint they will evolve in an economic and societal manner. I have discussed the overall current and future U.S. employment situation on the “U.S. Employment Trends” page.
While there are many charts that can be shown, one that depicts a worrisome trend is the Civilian Labor Force Participation Rate for those with a Bachelor’s Degree and Higher, 25 years and over. Among disconcerting aspects of this measure is the long-term (most notably the post-2009) trend, especially given this demographic segment.
The current value as of the November 1, 2018 update (reflecting data through the October employment report) is 73.8%:
source: U.S. Bureau of Labor Statistics, Civilian Labor Force Participation Rate: Bachelor’s Degree and Higher, 25 years and over [LNS11327662], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 11, 2019: https://fred.stlouisfed.org/series/LNS11327662
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Other Indicators
As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.
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The Special Note summarizes my overall thoughts about our economic situation
I have written extensively about the importance of U.S. interest rate levels. Rising interest rates have substantial ramifications for many aspects of the current-day economy. My commentaries with regard to interest rates and the bond bubble are largely found under the “bond bubble” label. From an intervention perspective commentary is found under the “Intervention” label.
As reference, below is a long-term chart of the 10-Year Treasury yield since 1980, depicted on a monthly basis, LOG scale:
(click on charts to enlarge images)(charts courtesy of StockCharts.com; chart creation and annotation by the author)
Here is a long-term chart of the 10-Year Treasury yield since 2008, depicted on a daily basis, LOG scale:
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The Special Note summarizes my overall thoughts about our economic situation
My overall analysis indicates a continuing elevated and growing level of financial danger which contains many worldwide and U.S.-specific “stresses” of a very complex nature. I have written numerous posts on this site concerning both ongoing and recent “negative developments.” These developments, as well as other exceedingly problematical conditions, have presented a highly perilous economic environment that endangers the overall financial system.
Also of ongoing immense importance is the existence of various immensely large asset bubbles, a subject of which I have extensively written. While all of these asset bubbles are wildly pernicious and will have profound adverse future implications, hazards presented by the bond market bubble are especially notable.
Predicting the specific timing and extent of a stock market crash is always difficult, and the immense complexity of today’s economic situation makes such a prediction even more challenging. With that being said, my analyses continue to indicate that a near-term exceedingly large (from an ultra long-term perspective) stock market crash – that would also involve (as seen in 2008) various other markets – will occur. [note: the “next crash” and its aftermath has paramount significance and implications, as discussed in the post of January 6, 2012 titled “The Next Crash And Its Significance“ and various subsequent posts in the “Economic Depression” label]
As reference, below is a daily chart since 2008 of the S&P500 (through November 7, 2019 with a last price of 3085.18), depicted on a LOG scale, indicating both the 50dma and 200dma as well as price labels:
(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)
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The Special Note summarizes my overall thoughts about our economic situation
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.
An excerpt:
Economists are roughly split over whether the recent hiring slowdown reflects primarily a shortage of workers or softening demand for labor, a sign of continuing uncertainty about the outlook.
In The Wall Street Journal’s latest survey of economists, 45.3% blamed the slowdown on the tight labor market, which has made it harder for many employers to find enough workers. An additional 37.7% of respondents said the issue was ebbing desire to expand payrolls.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 30.19%. The individual estimates, of those who responded, ranged from 10% to 60%. For reference, the average response in October’s survey was 34.19%.
As stated in the article, the survey’s 57 respondents were academic, financial and business economists. Not every economist answered every question. The survey was conducted November 1 – November 5, 2019.
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Economic Forecasts
The current average forecasts among economists polled include the following:
GDP:
full-year 2019: 2.08%
full-year 2020: 1.72%
full-year 2021: 1.96%
full-year 2022: 1.94%
Unemployment Rate:
December 2019: 3.60%
December 2020: 3.79%
December 2021: 3.97%
December 2022: 4.03%
10-Year Treasury Yield:
December 2019: 1.76%
December 2020: 1.97%
December 2021: 2.29%
December 2022: 2.51%
CPI:
December 2019: 1.93%
December 2020: 2.00%
December 2021: 2.15%
December 2022: 2.16%
Crude Oil ($ per bbl):
for 12/31/2019: $56.09
for 12/31/2020: $55.10
for 12/31/2021: $58.26
for 12/31/2022: $59.12
(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” label)
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I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
While I do not agree with the current readings of the measure – I think the measure dramatically understates the probability of deflation, as measured by the CPI – the Federal Reserve Bank of Atlanta maintains an interesting data series titled “Deflation Probabilities.”
As stated on the site:
Using estimates derived from Treasury Inflation-Protected Securities (TIPS) markets, described in a technical appendix, this weekly report provides two measures of the probability of consumer price index (CPI) deflation through 2024.
A chart shows the trends of the probabilities. As one can see in the chart, the readings are volatile.
As for the current weekly reading, the November 7, 2019 update states the following:
The 2019–24 deflation probability increased from 0 percent to 2 percent on November 1 before falling from 2 percent to 0 percent on November 5 and remaining there on November 6. The 2018–23 deflation probability was 0 percent on November 6, where it has remained since July 8. These deflation probabilities, measuring the likelihoods of net declines in the Consumer Price Index over the five-year periods starting in early 2018 and early 2019, are estimated from prices of the five-year Treasury Inflation-Protected Securities (TIPS) issued in April 2018 and April 2019 and the 10-year TIPS issued in July 2013 and July 2014.
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I post various economic indicators and indices because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
