Data source: Quarterly Informal Economy Survey (QIES) by World Economics, London. (3) April 26th (Census Bureau). Jacinta Price named shadow minister for Indigenous Australians . Monthly Annual and Post-Pandemic Payroll Declines Have Stabilized Around Minus Six-to-Seven Percent for the Last Eight Month, Weakest Showing Since 1946 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. New Numbers Indicate the Economy Was in a Deepening Recession, Well Before the Pandemic Shutdown and Collapse 1461. (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.] First-Quarter 2021 GDP Remains at Risk of Relapsing into Quarterly Contraction If you are not a Subscriber, and wish to be, see the next paragraph. Deepening Deficits in Fourth-Quarter and Annual 2020 Real Net-Exports (GDP) and the Related Real Merchandise Trade Deficit Were the Worst Ever in Modern U.S. Separately, circumstances are exacerbated directly, at present, by spiking, weekly gasoline prices, as seen through the week of April 17th. Continuing Massive Expansions of Federal Government Deficit Spending and Federal Reserve Monetary Stimulus Promise Massive Inflation Internationally, these activities are more broadly referred to as the shadow economy. Per the NAR Press Release, Existing-home sales retreated 2.4% in March to a seasonally adjusted annual rate of 4.44 million. (7) April 20th (National Association of Realtors NAR). While the now-broadest aggregate Money Supply M2 declined year-to-year by 4.1% (-4.1%) in March 2023, the highly liquid and inflation driving Basic M1 was up by 4.8% year-to-year. Annual growth in Payrolls has been slowing since February 2022. Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. (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.] 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. John Williams, founder of Shadow Government Statistics, . 1454, No. Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded, not reduced. The dotted lines are the overlayed series created from the official CPI statistics. 1459. Background definitions and related detailed discussion, historical data and graphs for each of the Money Supply Series were covered in Benchmark Commentary No. Risk of Hyperinflationary Economic Collapse Has Accelerated With Democrats Taking Control of Both the White House and Congress COVID-19 vaccines and improved treatment have helped to stabilize a still-disrupted level of economic activity, again well shy of a fundamental, full recovery, yet Pandemic issues, including new variants and vaccination controversies, continue. Permits up strongly but it's all apts inSouth. Where Pandemic Forced the Shutdown of the U.S. Economy in March 2020, FOMC Rate Hikes Already Had Strangled Business Activity Underlying Fundamentals Remain Extremely Strong for Gold and Silver, and Weak for the U.S. Dollar and Stocks, Despite Central Bank or Other Systemic Machinations to the Contrary, January 2021 Manufacturing Declined Year-to-Year for the 19th Consecutive Month, Still in the Downturn Induced by the FOMC 15 Months Before the Pandemic Collapse 2023 Shadow Government Statistics, Walter J. Williams. The Committee will closely monitor incoming information and assess the implications for monetary policy. He received an A.B. 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. Financial Market Turmoil Is Just Beginning, Key Monthly Economic Numbers Turned Negative Anew in Fourth-Quarter 2020 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%. Further background on the SGS-Alternate CPI series is available in our Public Comment on Inflation Measurement. At the same time, the Pandemic-distorted and disrupted year-to-year gain for February 2023 Basic M1 eased to 4.8% from and unrevised 6.2% in February 2023. Australia's Government Strengthens Grip With By-Election Win. If you are a Subscriber and are not receiving, but would like to receive those e-mails, please send a note to johnwilliams@shadowstats.com along with the desired e-mail address. Against its Pre-Pandemic Trough (PPT), ShadowStats March 2023 Basic M1 (Currency plus Demand Deposits [83% of the old pre-May 2020 M1]) moved higher to 120.5%, from a revised 119.8% (previously 119.3%) in February, still shy of its historic peak of 123.2% in August 2022. Data downloads and the Inflation Calculator are Subscriber only. I also have, This material is provided under the ShadowStats.com. 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. (2) April 27th (Bureau of Economic Analysis), also see Note 17. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. (February 3rd 2023/April 5th 2022) U.S. GOVERNMENT DETERIORATING FISCAL CONDITIONS/ INTENSIFYING FISCAL CRISIS [In context of the United States once again at the brink of breaking its Debt Ceiling and risking default ] Grievously malfeasant U.S. Government fiscal policies continue to contribute meaningfully to the rapidly accelerating pace of U.S. Inflation. Single-family auths flat in Sep/Oct. Year-to-Year Gain in Monthly November M1 Jumped to a Record 53.2% from the Prior Record of 42.3% in October, Surged to 65.6% in Week-Ended November 30th While the January 2021 Cass Freight Index Gained Year-to-Year for the Fourth Straight Month, It Also Contracted by 1.6% (-1.6%) from Two Years Ago When the Pandemic hit the U.S. economy and financial system hard in March and April 2020, the Federal Reserve responded with massive expansion of the Money Supply (eventually the equivalent of 23-years-worth of regular Basic M1 stimulus -- Systemic Liquidity). "John" Williams was born in 1949. Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. Dan Heng builds: Sharpen that spear. Policies and programs that are framed on the basis of unreliable statistics may be inappropriate and self-defeating. He received an A.B. Real Annual Growth in New Orders for Durable Goods Turned Negative, Amidst Renewed Slowing in Commercial Aircraft Orders Commentary No. Mind the Aftershocks: Post-Tantrum Market Calm Unnerves Traders . Those details are posted and graphed on the Alternate Data Tab. Beyond Year One, Multi-Year, Crisis-Driven Collapses Need to Be Assessed Against Pre-Crisis Levels, or Stacked Two-Year Change, As Well As Year-to-Year Change (17) March 30th (Bureau of Economic Analysis BEA, See Note 2) -- Third and Final Estimate of Fourth Quarter 2022 (4q2022) Gross Domestic Product (GDP) [The GDP Alternate Data Tab has been updated] - In continuing downside revision, the third-estimate of inflation-adjusted real 4q2022 GDP revised lower to an annualized quarter-to-quarter gain of 2.57%, in its third and final estimate, from its second estimate of 2.68%, and its initial estimate of 2.89%, versus 3.24% in 3q2022. 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.] 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. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. 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. Read more about the World Economics Informal Economy database. We thank Cass Information Systems for sharing their survey information. Holding Physical Precious Metals Remains the Best Hedge Against Developing Inflation and Financial-Market Turmoil, Pandemic-Driven Unemployment Soared to an April 2020 Peak of About 32%, Worse Than in the Great Depression; Such Was Against a January 2020 Pre-Pandemic U.3 Unemployment Rate of 3.5% The initial headline annualized quarterly estimate of inflation-adjusted First-Quarter 2023 Real Gross Domestic Product (GDP) showed doubly negative patterns of activity. 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. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. 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 Money Supply activity reflected a continuing and intensifying 55-year record-high flight to liquidity in Basic M1 (Currency plus Demand Deposits), with Basic M1 notching higher to 35.0% of the aggregate headline Money Supply M2, its highest proportion since the same level in April 1970, a 53-year high. 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. 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 -- The University of Michigans full-month release of the April 2023 Consumer Sentiment reading held little changed at 63.5, against its initial estimate of 63.5, up from 62.0 in March 2023, holding shy by 37.1% (-37.1%)[previously by 38.6% (-38.6%) in March] of ever recovering its February 2020 pre-Pandemic peak level of 101.0. Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. 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. "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. (6) April 24th (Census Bureau). 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. (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. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). 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. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. Discussions on the inflation threat and re-accelerating money growth are found in Special Hyperinflation Commentary, Issue No. 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. Where January 2021 Year-to-Year Manufacturing Contracted by 1.0% (-1.0%), It Also Contracted by 1.8% (-1.8%) from January 2019, Two Years Ago For the month of February 2023, the real Deficit deepened to -l04.6 billion. U.S. Dollar Collapse Accelerates 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). PLEASE NOTE: In 10 days (March 24th), this Retail Sales Series will undergo an annual benchmark revision. Further definition is provided in our CPI Glossary. Yet, Fourth-Quarter 2020 New-Home Sales Contracted, as Did Real Retail Sales, Suggestive of Consumers Facing Intensifying Pandemic and Liquidity Issues Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. Economic Recovery Is Not as Close as Hyped by the Consensus Outlook 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)]. The annual drop of 22.0% (-22.0%) in March was against a 23.1% (-23.1%) annual decline in February, and was the eighth straight month of annual contraction deeper than minus 20% (go to https://www.nar.realtor/existing-home-sales for details). 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. -- In line with FOMC rate hikes, annual Payroll Growth has been slowing for the last fourteen months, from 5.3% in February 2022 to 2.7% in March 2023, suggestive of softening economic activity. -- In contrast, the ShadowStats Inflation-Corrected GDP Estimate (updated and graphed in full detail on the ALTERNATE DATA Tab) is corrected for the understatement of the headline inflation used in deflating Nominal GDP to Real GDP. The revisions did not change quarterly patterns meaningfully, but did show that broader headline activity generally had been some somewhat slower than previously estimated in the last two years [graphs were plotted in the Subscriber-only e-mail of April 14th]. PLEASE NOTE: In 10 days (March 24th), this Retail Sales Series will undergo an annual benchmark revision. Walter J. [Again, the E-Mail Updates are available to you as part of both new and existing regular subscription; just request it by e-mail from johnwilliams@shadowstats.com .] Evolving Circumstances Remain Extremely Strong for Gold and Silver, and Weak for the U.S. Dollar and Stocks, Despite Central Bank or Other Systemic Machinations to the Contrary, Intractable and Deteriorating Conditions Still Signal No Imminent Economic Recovery, Irrespective of Some Bounces in March Activity Against Weather-Driven February Collapses First-Quarter 2021 GDP Increasingly Is Set for a Relapsing Quarterly Contraction (5) April 25th (Census Bureau). (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 Employment series is based on actual Payroll Taxes paid by Employers, as opposed to irregular (Pandemic-induced, telephone-only) impaired surveys of the Public as to Unemployment. November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity March 7th builds: Power up the pink archer. Public Comment on Inflation Measurement & the Chained CPI-U, Update 2016Update 2015Hyperinflation 20142014 Second InstallmentDeficit Reality. 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. Shadowstats primarily focuses on inflation, but also keeps track of the money supply, unemploymentand GDPby utilizing methodologies abandoned by previous administrations from the Clinton era to the Great Depression. Tourism Research Australia (TRA) provides statistics, research and analysis to support industry development and marketing activities for the Australian tourism industry. 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. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%. (14) April 7th (Bureau of Labor Statistics BLS, and ShadowStats.com). For all readers, in general, if you have any questions or otherwise would like to communicate, please e-mail johnwilliams@shadowstats.com or call (707) 763-5786. Full-Year 2020 Annual GDP Decline of 3.5% (-3.5%) Was the Deepest Since the 1946 Post-World War II Economic Reset Current U.S. Economy Remains Far from a Full Recovery FOMC Has Trouble Forecasting Inflation One Quarter Ahead, Let Alone Two Years Ahead Those details are posted and graphed on the Alternate Data Tab. Annual growth in Payrolls has been slowing since February 2022. Shadowstats debunked. Ongoing rate hikes at each of the last several FOMC Meetings to reduce inflation, remain counterproductive in the context of an already deepening Economic Recession and resurgent gasoline prices. March 2023 Industrial Production, Manufacturing and Capacity Utilization showed meaningful downside benchmark revisions to previously reported activity, but continued in a third month of upturn in context of Federal Reserve regular overestimation of headline Industrial Production. For those looking to subscribe, please go to the SUBSCRIPTION LINK at the upper left-hand corner of this Web page). Those numbers are adjusted for inflation, using the Construction Producer Price Index. -- 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. Per the NAR Press Release, Existing-home sales retreated 2.4% in March to a seasonally adjusted annual rate of 4.44 million. The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In Australia, unions are already demanding 3 per cent annual pay rises in wage negotiations, while Labor's shadow treasurer Jim Chalmers used Tuesday's data to highlight that inflation was. Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to, clientslarge and smallincluding talks with members of the business, banking, government, press, academic, brokerage and investment communities. Stock Indices Are At or Near All-Time Highs, Coming into the First Anniversary of the Pre-Pandemic Stock-Market Peaks and Subsequent Crashes While the headline number usually is the seasonally-adjusted month-to-month change, the formal CPI is reported on a not-seasonally-adjusted basis, with annual inflation measured in terms . 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 From a revised -101.7 (previously -101.7) billion, from a revised -98.2 billion in December, its worst monthly showing since -112.4 billion in October 2022. 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. The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 ShadowStats will re-address these numbers at that time. The original Money Supply measure, Basic M-1 is defined as Currency plus Demand Deposits (checking accounts). 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]. 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. Near-Term Financial-Market Turmoil Likely Is Far from Over, Given Renewed Deterioration in Economic Conditions, Fourth-Quarter 2020 Annualized Real GDP Growth of 4.0% Was as Expected, Slowing from the Record 33.4% Third-Quarter Pandemic Rebound The flight of cash to relatively greater liquidity and safety in the narrower Money Supply measures, specifically in Basic M1, saw March 2023 relative liquidity at a new 53-year high (Basic M1/M2) of 35.0%, since September 1970. S Y S T E M I C .. R I S K -- FEDERAL RESERVE -(April 25th) Coverage of the March 2023 Money Supply and March 2023 Monetary Base follows in the MONEY SUPPLY AND MONETARY BASE Section, subsequent to this FOMC Section. Under current policy and based on this reports assumptions, it is projected to reach 701 percent by 2096. 1461 will review the underlying GDP, GDI and GNP numbers. FOMC action looms this week, amidst signs of a tanking Economy and a serious Inflation problem. In contrast, the usually less meaningfully sampled Housing Starts, tend to be more volatile in revision. 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%.
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