Editor’s be aware: This text was initially printed on October 16, 2020 by Menzie Chinn here.
With the discharge of business manufacturing figures at the moment, the deceleration in financial exercise continues, in response to some key indicators famous by the NBER’s Business Cycle Dating Committee (BCDC).
Determine 1: Nonfarm payroll employment (darkish blue), Bloomberg consensus for October as of 10/16 (gentle blue sq.), industrial manufacturing (purple), private earnings excluding transfers in Ch.2012$ (inexperienced), manufacturing and commerce gross sales in Ch.2012$ (black), and month-to-month GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Supply: BLS, Federal Reserve, BEA, through FRED, Macroeconomic Advisers (10/1 launch), NBER, Bloomberg, and writer’s calculations.
Industrial manufacturing fell -0.6% m/m vs. Bloomberg consensus of +0.5%. The collection was revised upward in August, so the extent of business manufacturing was nonetheless greater than the sooner estimate for August. Nonetheless, if it is the trajectory that is of curiosity, then this isn’t excellent news. Be aware that this decline just isn’t pushed by mining and/or utilities output decline. Manufacturing manufacturing fell -0.three m/m vs. consensus of +0.7%.
Bloomberg consensus as of at the moment for the October employment figures is 850Okay new jobs (as proven in blue sq. in Determine 1). I ponder if this quantity takes under consideration the surge in Covid-19 across the nation. If one seems to be on the Covid-19 hospitalization figures, one has to surprise if employment progress – comparable to it’s – might be maintained.
Determine 2: Nonfarm payroll employment (darkish teal, left log scale), Bloomberg consensus for October as of 10/16 (gentle blue sq.) and Covid-19 hospitalizations by means of 10/15 (brown, proper log scale). October hospitalizations log linearly interpolated from first half of October. Supply: BLS, Covid Monitoring Undertaking accessed 10/16, and writer’s calculations.
Editor’s Be aware: The abstract bullets for this text have been chosen by Looking for Alpha editors.