{"id":2517,"date":"2008-01-04T15:01:25","date_gmt":"2008-01-04T15:01:25","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2517"},"modified":"2025-03-27T15:48:34","modified_gmt":"2025-03-27T15:48:34","slug":"us-data-suggesting-flat-economy-not-recession","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2517","title":{"rendered":"US data suggesting flat economy not recession"},"content":{"rendered":"<p>On the last reading my probability indicator suggested a <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2007\/11\/19\/is-us-recession-now-inevitable.html\">45%<\/a> chance of a US recession (I shall provide an update soon). While below the &ldquo;trigger&rdquo; level, such a high reading clearly implies a weak economy, with GDP growing negligibly. The data this week have been consistent with this picture. <\/p>\n<p>Take today&rsquo;s employment report for December. I think the index of aggregate hours worked in the private sector is a better cyclical indicator than headline non-farm payrolls. As the first chart shows, this measure has shown little growth over the last three months but is not yet contracting &ndash; a necessary but not sufficient condition for a recession. <\/p>\n<p>A similar message comes from another sensitive indicator &ndash; the new orders index from the ISM manufacturing report. This index plunged to 46 in December but has fallen to 43 or below in recessions historically &ndash; see second chart. <\/p>\n<p>If the US economy does fall into recession the culprit will be not the &ldquo;credit crunch&rdquo; but soaring energy prices. At the risk of labouring the point, I think premature Fed easing has been a significant contributor to this surge. <\/p>\n<p><span class=\"full-image-float-left\"><\/p>\n<p><img decoding=\"async\" style=\"width: 500px; height: 310px\" alt=\"us-recession-private-aggregate-hours.jpg\" src=\"\/storage\/us-recession-private-aggregate-hours.jpg\" \/><\/p>\n<p><\/span><\/p>\n<p><span class=\"full-image-float-left\"><img decoding=\"async\" style=\"width: 500px; height: 307px\" alt=\"us-recession-ism-manu-new-orders.jpg\" src=\"\/storage\/us-recession-ism-manu-new-orders.jpg\" \/><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On the last reading my probability indicator suggested a 45% chance of a US recession (I shall provide an update soon). While below the &ldquo;trigger&rdquo; level, such a high reading clearly implies a weak economy, with GDP growing negligibly. The data this week have been consistent with this picture. Take today&rsquo;s employment report for December. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2517","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2517"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2517\/revisions"}],"predecessor-version":[{"id":4826,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2517\/revisions\/4826"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}