That revised February inflation of 16.1% was much higher than the year-to-year nominal growth of 5.3% in parallel February Construction Spending, resulting in an unrevised, inflation adjusted, real year-to-year decline of 9.5% (-9.5%) in February 2023 [See extended comments in later Note (16)]. Noted the by the U of M, Despite the increasingly negative news on business conditions heard by consumers, their short and long-run economic outlook improved modestly balanced by worsening assessments of personal finances due to higher expenses, reflecting the ongoing pain stemming from continued high prices. [Go to http://www.sca.isr.umich.edu for the full details.]. -- In contrast, the ShadowStats Corrected Alternate-GDP estimate, adjusted for the continual understatement of headline GDP Inflation, and the corresponding continual overstatement of growth in the Real GDP, showed a corrected 1q2023 real annualized quarterly contraction of 0.98% (-0.98%), against a 0.50% 4q2022 gain, with an annual contraction of 0.49% (-0.49%) in 1q2023, against an annual drop of 1.16% (-1.16%) in 4q2022. Please note that the ShadowStats Alternate Unemployment Data and Graphs have been updated for March 2023 on the ALTERNATE DATA TAB (see the above links ribbon). Minimizing Reporting of Such, the Fed Just Redefined Money Supply M1; Given Newly Defined M1-Like Liquidity Characteristics for M2 Savings Deposits, Savings Have Been Shifted Retroactively from M2 to into M1, Effective as of May 2020 (4) April 25th (Federal Reserve Board, ShadowStats) -- Headline U.S. March 2023 Money Supply and Monetary Base details showed a continuing creation of, or a shift or flight to liquidity, all of which tends to fuel inflation. Given a moribund, underlying U.S. Economy, raising rates further [as had been heavily jawboned and promised by the Fed Chairman, among other FOMC members, until the most-recent March 2023 FOMC] likely will only exacerbate deteriorating economic conditions, without providing any meaningful inflation relief. That said, the aggregate series quarterly sales, have been in annual decline for each of the last seven quarters, up through the current 1q2023, in an otherwise deepening housing recession. Here is how the March 2023 Money Supply numbers shaped up. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. "John Williams Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype. Federal Reserve Chairman Powell: "We Are a Long Way from Full Recovery" That said, there have numerous stories in recent months of misreported, headline employment gains. An old friendthe late-Doug Gillespieasked me some years back to write a series of articles on the quality of government statistics. -- Severe Systemic structural damage and distortions from the Pandemic-driven Shutdown continues to forestall meaningful Economic Rebound into 2023 and beyond, despite a reopened economy, in context of flummoxed Fiscal and Monetary Policies, and ever-evolving COVID-19 and related circumstances, and the continuing Russia-Ukraine conflict. Nonetheless, systemic Turmoil is still evolving, with both the Federal Reserve and U.S. Government continuing to drive uncontrolled U.S. dollar creation, between unconstrained Money Supply growth (irrespective of Balance Sheet Reduction) and uncontained Deficit Spending, with U.S. Treasury Debt currently pushing to break the $31.4 Trillion Debt Ceiling. If you are not a Subscriber, and wish to be, see the next paragraph. On Top of Downside Revisions, Declining November Real Retail Sales Showed Renewed Economic Deterioration Search Text. Headline 1q2023 GDP annualized Real GDP growth of 1.06% slowed from an unrevised 2.57% in 4q2022, while annualized quarterly inflation picked from 3.92% to 4.01%. The U.S. Dollar Is at Its Lowest Level Against the Swiss Franc Since January 2015, Down by 10.0% (-10.0%) Year-to-Year A Weak Dollar Is Highly Inflationary for the United States and Bullish for Gold Despite a small monthly narrowing in the headline March 2023 Unemployment Rate, details remained consistent with an unfolding recession. -- The Feds Balance Sheet Reduction formally began in June 2022 and should have begun to relieve some Money Supply pressures on Inflation at that time, in theory. (11) April 14th (CassInfo.com) The March 2023 Cass Freight Index release noted that The shipments component of the Cass Freight Index fell 1.0% m/m in March as freight markets continue to work through an extended soft patch. That monthly decline of 1.0% (-1.0%) was not seasonally adjusted, with a related unadjusted year-to-year drop of 4.0% (-4.0%). The 2020 Pandemic-Driven Recession was timed by the defining National Bureau of Economic Research (NBER), from Peak-to-Trough, as from February 2020 to April 2020 [2 months, the shortest on record] and from Fourth-Quarter 2019 to Second-Quarter 2020 [2 quarters]. April 2023 Annual Benchmark Revisions lowered historical levels and growth estimates for inflation-adjusted Real Retail Sales back to January 2021, likely foreshadowing some downside revisions to headline GDP in its later 2023 benchmarking. Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. New Numbers Show Production Peaked in August 2018 and Entered Protracted Decline, February 2020 Pre-Pandemic Peak Was 1.11% (-1.11%) Below the Pre-Great Recession Peak Read more about the World Economics Informal Economy database. Discussions on the inflation threat and re-accelerating money growth are found in Special Hyperinflation Commentary, Issue No. Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels All previous Commentaries are available in, or accessible from, the upper left-hand column of this www.shadowstats.com Home Page. ALTERNATE DATA TAB [See the Menu Bar above] provides the latest headline numbers and exclusive ShadowStats Alternate Estimates and related Graphs of CPI Inflation [April 13], GDP [April 27], Unemployment [April 7], Money Supply [April 25] and the ShadowStats Financial-Weighted U.S. Dollar [January 10]. Shadow previously offered three subscription plans: Shadow Boost ($14.99 per month, or $11.99 per month with an annual subscription) with a basic gaming PC setup, Shadow Ultra ($29.99 per. Republishing our charts: Permission, Restrictions and Instructions (includes important requirements for successful hot-linking), Analysis Behind and Beyond Government Economic Reporting, This material is provided under the ShadowStats.com. The pattern of current activity remains consistent with a deepening, albeit not formally recognized Economic Recession. Accordingly, ongoing massive Fiscal and Monetary Stimuli will be needed, and likely will expand into 2024/2025, irrespective of the FOMCs pronounced tightening. As demonstrated in recent decades, FOMC stimulus likely will remain in play, as targeted by the FOMC, primarily, in order to prevent a collapse in the Banking System, or to magnify liquidity in the Banking System, which owns and controls the Federal Reserve, not to stimulate the Broad Economy, per se. 1461. -- Despite recent GDP Benchmark Revisions and current gimmicked reporting, key Economic Series show not only that the Pandemic-driven Economic Collapse was worse than headlined, but also that the still-unfolding Recovery has been much weaker than indicated. Yet, with the new Fed Funds Rate at a 15-plus-year high (since July 2007), the earlier FOMC rate hikes already are pummeling the economy, but again, not relieving inflation. Despite numerous, separate indications of the economy stalling or turning down anew (see the earlier GDP, Consumer Sentiment, New Orders for Durable Goods, Industrial Production, and Construction Spending), such broadly is ignored at present. Under current policy and based on this reports assumptions, it is projected to reach 701 percent by 2096. The FOMC announced in its March 22nd Press Release: Recent indicators point to modest growth in spending and production. -- Extended Fed coverage will follows in the later SYSTEMIC RISK SECTION -- FEDERAL RESERVE, with an updated story following the pending May 3rd FOMC coverage, as well as a comprehensive review of Federal Reserve Monetary Policies and Federal Government Fiscal Policies in pending Commentary No. 1461. That said, the initial estimate of the theoretical GDP-equivalent 4q2022 Gross Domestic Income (GDI) showed an annualized quarterly contraction of 1.14% (-1.14%), versus an annualized gain of 3.76% in 3q2022, with the more traditional Gross National Product (GNP) gaining at an initial annualized 2.38% in 4q2022 GDP, versus 2.44% in 3q2022. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. SHADOWSTATS SUBSCRIPTIONS Economic and financial issues raised here are reviewed more extensively, along with exclusive graphs, and expanded economic, financial market and monetary assessment in subscriber-only Commentaries [monthly going forward], and more frequently on a timely basis in the subscriber-only e-mails of daily changes in the DAILY UPDATE (as the news breaks, see the prior paragraph). Yet, as discussed here frequently, the problem inflation largely is being driven by the FOMCs still explosive Money Supply and System Liquidity growth, not by an overheating economy. -- Headline March 2023 U.3 and U.6 Unemployment of 3.50% and 6.68% notched lower from respective three- and six-month highs of 3.57% and 6.80% in February, but held above January 2023 levels. Consider that where latest headline 4q2022 GDP was up by an increasingly tepid 0.88%, and by 5.04% against its Pre-Pandemic level, the ShadowStats Alternate was down by 1.16% (-1.16%) year-to year, and down by 1.22% (-1.33%) against its Pre-Pandemic level. India's Jobless Rate Hits a Three-Month High of 7.8%, CMIE Says. Against Pre-Pandemic levels, Currency moved from a gain of 27.9% in February to 38.7% in March 2023, with parallel increases from 83.4% to 96.6% for Reserves, and from 54.11% to 61.3% in aggregate Monetary Base. Old Numbers Showed Production Peaked in December 2018 and Flattened Out, February 2020 Pre-Pandemic Peak Was 3.75% Higher Than the Pre-Great Recession Peak Broadly, the aggregate Monetary Base had been in decline since hitting a peak in January 2021, but it has turned higher in the last several months. (3) April 26th (Census Bureau). November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 Commentary No. A Review-Preview of 2020 into 2024, it will incorporate all the latest economic details. Latest Weekly Money Supply M1 Jumped an Unprecedented 72.3% Year-to-Year (4) April 25th (Federal Reserve Board, ShadowStats) -- Headline U.S. March 2023 Money Supply and Monetary Base details showed a continuing creation of, or a shift or flight to liquidity, all of which tends to fuel inflation. Republishing our charts: Permission, Restrictions and Instructions (includes important requirements for successful hot-linking) March 2023 Real New Orders for Durable Goods -- For fourteen consecutive quarters, through First-Quarter 2023, Real New Orders for Durable Goods (deflated by the Durable Goods PPI, and net of the volatile Commercial Aircraft orders), never has recovered its Third-Quarter 2019 Pre-Pandemic Peak activity. Negative Implications Here for the July 29th GDP Benchmarking ShadowStats will re-address these numbers at that time. A similar pattern is likely with the Census Bureaus May 1st release of March 2023 nominal Construction Spending, given the activity patterns and related needed inflation-adjustments already in play. That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. The aggregate Real Annual Merchandise Trade Deficit for 2022 was unrevised at -1,320.2 Billion Chained (2012) Dollars, again, its worst showing in history. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5 percent. Unemployment. PLEASE NOTE: In 10 days (March 24th), this Retail Sales Series will undergo an annual benchmark revision. John Williams, founder of Shadow Government Statistics, . I also have provided testimony before Congress (details here). EXPANDED SHADOWSTATS ALERT: - Intensifying Risks of a Highly Inflationary, Major U.S. Economic Downturn. As Tim notes, this is a gobsmacking error. A new analysis will follow with preliminary April 2023 numbers late this coming week. ET), with posing here May 2nd; Wednesday, May 3rd; the May FOMC Meeting draws to a close, with a Press Release (at 2:00 p.m. Aside from some short-term reporting gimmicks, Payroll Employment probably still is the highest-quality economic statistic published by the U.S. Government, at present, given current data and the reporting-compromised conditions of a still-evolving Pandemic/ post-Pandemic environment. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. 1461. He received an A.B. In the end, the Fed has little choice but to support the banks and to let inflation run its course. Economic, FOMC, financial-market, political and social circumstances all continue to evolve along with the Pandemic and its aftermath in still-unfolding, extraordinary political circumstances. Those details are posted and graphed on the Alternate Data Tab. (7) April 20th (National Association of Realtors NAR). B U S I N E S S .. C Y C L E -- RECESSION-DEPRESSION TIMING Updated September 21, 2021 [Full review and update pending in No. (8) April 18th, (Census Bureau). Contact us to discuss your needs. Shadowstats debunked. (6) April 24th (Census Bureau). Treasury Secretary Janet L. Yellen did not describe in her Opening Message for 2021, as she had in 2020, and as her recent predecessors had done, that the current Fiscal Path was Unsustainable. Yet that concept still appeared early in the Opening Summary: The debt-to-GDP ratio was about 100 percent at the end of FY 2021 [around 122% in November 2022 WJW]. Those details are posted and graphed on the Alternate Data Tab. The CPI-U (consumer price index) is the broadest measure of consumer price inflation for goods and services published by the Bureau of Labor Statistics (BLS).. March 2023 New Residential Construction continued in statistically significant annual year-to-year collapse for both Building Permits and Housing Starts. I've yet to find someone who has been able to reproduce the claims made by Shadow Government Statistics about the extent to which government agencies are grossly misreporting the U.S. inflation rate. Where current inflationary pressures appear to be tied to excessive Monetary stimulus out of the Fed, not due to an overheating economy, still higher interest rates, now, would do little to contain inflation, while at the same time higher interest rates would continue to impair economic activity. ET]. The NBER called an end to the 2020 Recession on July 19th, again, just the first leg of the Depression. Separately, though, the Fed also purportedly has been reducing its balance sheet assets, which should slow or cut the Money Supply growth and inflation. and growth As repeated here frequently, raising interest rates sharply now only pummels further an already moribund economy, it does little to contain the Feds current monetary inflation problem. Underlying headlines of better-quality U.S. economic numbers, reviewed here in Part II [see Points (1) to (18)], suggest that the United States has been in Recession since First-Quarter 2022, allowing for the political games played with the Strategic Petroleum Reserve depletion, which otherwise also accounted for the headline boost in Second-Half 2022 (Third- and Fourth-Quarter 2022) GDP growth. 1461. 1454, No. Permits up strongly but it's all apts inSouth. Single-family auths flat in Sep/Oct. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. (2) April 27th (Bureau of Economic Analysis), also see Note 17. Details and related graphs follow in the next Subscriber e-mail, with extended review and coverage of this Fed-acknowledged regular pattern of initial upside reporting and later downside benchmark revisions to this series, as otherwise pending in Commentary No. ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. Details and related graphs follow in the next Subscriber e-mail, with extended review and coverage of this Fed-acknowledged regular pattern of initial upside reporting and later downside benchmark revisions to this series, as otherwise pending in Commentary No. (10) April 14th (Census Bureau, Bureau of Labor Statistics, St. Louis Fed, ShadowStats) [See the Opening Comments on the April 24th annual benchmark revisions to Retail Sales, which continue to show flat to negative annual contractions and quarterly contractions, net of inflation.] CPI-adjusted, Real Retail Sales declined by 1.04% (-1.04%) month-to-month in March 2023, down by 1.95% (-1.95%) year-to-year, with First-Quarter 2023 Real Retail Sales declining 0.30% (-0.30%) year-to-year, down for the fourth time in the last five quarters, otherwise gyrating with extreme volatility in recent monthly automobile sales. Including Commercial Aircraft, aggregate New Orders recovered pre-Pandemic levels in Third-Quarter 2020. -- Headline Fourth-Quarter 2022 GDP inflation (Implicit Price Deflator [IPD}) came in at a revised third estimate of an annualized pace of 3.92% (previously 3.93% and 3.51%), against an unrevised 4.36% in 3q2022, and up by an unrevised year-to-year 6.41% (initially 6.30%), versus an unrevised 7.15% in Third-Quarter 2022, which remained at a 42-year high, outside of the recent inflation spike. ARCHIVES - VIEWING EARLIER COMMENTARIES. G E N E R A L .. H E A D L I N E S .. -- Contrary to the happy political and financial media hype, the Pandemic-driven and FOMC-exacerbated U.S. Economic Collapse continues to harden in protracted non-Recovery, amidst mounting evidence of renewed Economic Downturn and recent excessive Inflation, which is about to re-accelerate, and still vulnerable to evolving Russia-Ukraine War risks, seriously conflicted FOMC monetary policies, and extraordinarily dangerous Administration fiscal activity. Separately, the inflation issue is complicated by independently rising gasoline prices, not by any overheating economy! Liquidity-Strapped Consumers Move to Cash, Spiking Traditional Money Supply M1 With a further quarter-point rate hike expected out of this weeks May 2nd to 3rd FOMC Meeting, following nine consecutive FOMC Meeting rate hikes (0.25% at the last three meetings, 0.50% and 0.75% earlier), the U.S. Central Bank appears intent on using surging interest rates to drive the U.S. economy into the ground. Ukraine Latest: War Casts Shadow Over Votes in Bulgaria, Finland. Yet, Fourth-Quarter 2020 New-Home Sales Contracted, as Did Real Retail Sales, Suggestive of Consumers Facing Intensifying Pandemic and Liquidity Issues Nov 26, 2013 Housing Starts delayed again. That said, more commonly, sharp annual declines in recent months have tended to be statistically significant, but not the month-to-month changes. Further background on the SGS-Alternate CPI series is available in our Public Comment on Inflation Measurement. ShadowStats will re-address these numbers at that time. the Plunge Protection Team), or as otherwise being gamed by the Federal Reserve. Unprecedented in 40-Plus Years of Weekly Monetary Reporting: Money Supply M1 Jumped by 14.1% in the Last Two Weeks, in a Post-Election / COVID-19 Flight to Cash, From M2 to M1
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