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. Annual Boom of 5.7% in October Real Retail Sales Was Not Credible; Related Retail Employment and Consumer Goods Production Continued in Annual Decline, Despite the Gain in Freight Activity (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. "John" Williams was born in 1949. 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. -- With fundamental U.S. Dollar debasement (inflation) intensifying, irrespective of short-lived games with reduced oil prices, and especially in the context of the Fed and related entities having to balance, bail out or backstop an increasingly troubled Financial System, holding physical Gold and Silver protects the purchasing power of ones assets, irrespective of any near-term Central Bank or other precious metals price machinations to the contrary. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. ET]. -- A little closer to real-world numbers, initial year-to-year headline March 2023 PPI Construction Inflation eased to 15.6%, from a minimally revised 16.1% (previously 16.2%) in February 2023. 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. ShadowStats contends that it is the extraordinary liquidity surge after the February 2020 collapse that is driving the inflation, and which needs to be worked down in order to bring the inflation circumstance under control. Use the drop-down menu below to find highlights and links to Commentaries from the present and past months. I also have provided testimony before Congress (details here). ET); Thursday, May 4th, the Census Bureau and Bureau of Economic Analysis release the March 2023 Trade Deficit (8:30 a.m. For the Second Straight Month, Payrolls Declined Year-to-Year by 6.0% (-6.0%) 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. 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 That also was in context of a deepening shortfall against its Pre-Pandemic Peak by 1.46% (-1.46%) in 1q2023, versus a 1.22% (-1.22%) shortfall in 4q2022. John Williams, founder of ShadowStats, calculates inflation using the same methodology that the government used to have for calculating the consumer price index (CPI). Shadow Government Statistics or Shadowstats is a blog run by John Williams in which he re-analyzes government economic /unemployment published statistics in order to restate them. 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. Gasoline prices having been in an upswing since January 2023, gaining 11.7% since December 2022, as of the just-released April 2023 monthly average [EIA]. 1451, No. Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. 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. U.S. Government 2021 Financial Statements showed the deepening deficit net worth of the U.S. Governments financial condition hit a record shortfall, or negative net worth, of $123.5 trillion in Fiscal Year 2021 (year-ended September 30), widening from a $113.8 trillion negative net worth in 2020. It remains ShadowStats contention that the surging headline inflation is due to FOMC-triggered massive growth in the Money Supply and Monetary Liquidity, as reflected in the highly liquid Basic M1 (Currency plus Time Deposits / Checking Accounts), not due to an Overheating Economy. 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. Separately, all as measured against Pre-Pandemic Troughs, traditional M2, which has not been redefined, was up by 34.7% in March 2023, versus readings 36.4% in February 2023 and 37.3% in January, while the broadest ShadowStats Ongoing-M3 Estimate notched lower in March to 30.2%, from 31.9% in both February and January 2023. 1459. Financial Market Turmoil Is Just Beginning, Key Monthly Economic Numbers Turned Negative Anew in Fourth-Quarter 2020 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]. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. Unemployment. 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. 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. Those numbers are adjusted for inflation, using the Construction Producer Price Index. U.S. Dollar. 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. In the Latest Four Months, Pandemic-Driven Unemployment Has Leveled Off Around 12%, Worst Since Before World War II, Other than for the Pandemic I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless. 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. Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. The Committee is strongly committed to returning inflation to its 2 percent objective. 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. Search Text. 1459, again, with updated and expanded details pending in the Subscriber-only e-mails and No. October Industrial Production Continued in L-Shaped Recovery, With Annual Change Flattening Out in Negative Territory I also have, This material is provided under the ShadowStats.com. Shadow TUAS air vehicle The air vehicle system can be transported by two military wheeled vehicles and can be operated round-the-clock from unprepared sites by the 22-soldier crew. 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. ShadowStats will re-address these numbers at that time. ShadowStats is Williams' attempt to provide an alternative to the official consumer price index (CPI), which he views as a flawed measure of what members of the general public have in mind when. Stock Indices Are At or Near All-Time Highs, Coming into the First Anniversary of the Pre-Pandemic Stock-Market Peaks and Subsequent Crashes Separately, circumstances are exacerbated directly, at present, by spiking, weekly gasoline prices, as seen through the week of April 17th. (14) April 7th (Bureau of Labor Statistics BLS, and ShadowStats.com). The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 John Williams, founder of Shadow Government Statistics, . Weakening U.S. Dollar, Rebounding Gold and Oil Prices Foreshadow Rising Inflation, Four Million Unemployed People Are Missing from the Headline Labor Force 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 In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. Accordingly, the FOMCs near-term financial-market policy conundrum of creating Money Supply to support the financial system, while trying to kill inflation at the same time, has no happy resolution. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. 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]. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). According to a new study published by the Institute for Applied Economic Research at the University of Tbingen in Germany (IAW), the Greek shadow economy is estimated to average 21.5 percent of . (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. Those numbers are adjusted for inflation, using the Construction Producer Price Index. PLEASE NOTE: In 10 days (March 24th), this Retail Sales Series will undergo an annual benchmark revision. Bureau of Labor Statistics Reveals It Cannot Measure the CPI Properly, At Present Momentum of Fourth-Quarter Data Suggests a First-Quarter 2021 GDP Contraction, As the Pandemic and Political Tumult Take on Negative New Dimensions As Tim notes, this is a gobsmacking error. 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. 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 of year-to-year percent change in the price index. Money Supply. (12) April 13th (Bureau of Labor Statistics). March 2023 New Residential Construction continued in statistically significant annual year-to-year collapse for both Building Permits and Housing Starts. Liquidity-Strapped Consumers Move to Cash, Spiking Traditional Money Supply M1 The Committee remains highly attentive to inflation risks. Further background on the SGS-Alternate CPI series is available in our Public Comment on Inflation Measurement. 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. Scroll down for the latest ShadowStats Outlook, Background Information on the U.S. Economy, Financial System (FOMC), Financial Markets and Alternate Data, also for publicly available Special Reports and contact information. Mind the Aftershocks: Post-Tantrum Market Calm Unnerves Traders . 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. (3) April 26th (Census Bureau). Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation. 1461] -- The 2020 Economic Collapse Remains Far from full Recovery. 1461. That said, there have numerous stories in recent months of misreported, headline employment gains. Your Shadow subscription. Separately, extended full coverage and graphs of both the Money Supply and Monetary Base and their components follows in the pending Subscriber-only Daily Update E-mail. FOR SUBSCRIBERS Beyond the pending monthly Commentary, graphs covering the latest numbers and most other economic, inflation and monetary detail, are available to you by e-mail, as part of your existing, regular subscription. INFORMAL ECONOMY SIZE AS A PERCENTAGE OF GDP. Commentary No. 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 In contrast, the usually less meaningfully sampled Housing Starts, tend to be more volatile in revision. According to the stats bureau, output of solar cells rose 53.2% and new-energy automobiles (mostly electric vehicles) rose 22.5% . (13) April 12th (Bureau of Labor Statistics). Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. Separately, the Russia-Ukraine War continues to supply near-term uncertainty for and volatility to the domestic and global financial and commodity markets, amidst intensifying global political instabilities, all exacerbating systemic risks for related economic and financial market disruptions and crises. Revised year-to-year growth slowed to 0.88%, from 0.91% and an initial estimate of 0.96%, versus 1.94% in 3q2022. 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. Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels On Top of an Upside Revision, Housing Starts Gained 4.9% in the Month; This Was Not Statistically Significant at the 90% Confidence Interval Headline March 2023 CPI-U annual inflation eased to 5.0%, from 6.0% in February, again, due to the relative easing of March 2023 energy prices against the oil and gasoline price spikes triggered by the year-ago by Russian invasion of the Ukraine. 1461. The 2021 Financial Report is available here: https://www.fiscal.treasury.gov/reports-statements/financial-report/current-report.html -- ShadowStats will provide extended analysis in an updated Hyperinflation Commentary, which will post subsequent to the pending Commentary No. 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. ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. Severely Negative Annual Revisions to Industrial Production Mean the Economy Was in Recession Well Before the Pandemic Hit (7) April 20th (National Association of Realtors NAR). Data downloads and the Inflation Calculator are Subscriber only. Severe, U.S. Dollar-Debasing Inflationary Pressures from Existing, Extreme Monetary and Fiscal Policies Are About to Get Much Worse 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. Again, with the recovery from the Pandemic-driven collapse still flub-a-dubbing, continued extraordinary Monetary and Fiscal Stimulus likely will continue well into 2023, despite Financial-Market huffing and puffing to the contrary, and bi-furcated FOMC happy hype. Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data Series. 2021 Social Security Cost of Living Adjustment (COLA) Could Spike to a 40-Year High, Based on Potential Third-Quarter 2021 CPI-W (II) - REGULAR ALERTS Again, as noted after the February 2023 rate hike, despite Fed Chairman Jerome Powells continued downplaying risks for the FOMCs hoped-for imminent Recession, which otherwise ostensibly is why he was raising rates, that downturn already was and is in play. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. Gasoline prices having been in an upswing since January 2023, gaining 11.7% since December 2022, as of the just-released April 2023 monthly average [EIA]. 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. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. Payroll-Employment Benchmark Revisions Showed a Deepening, Accelerating Decline into an April 2020 Trough, With Renewed Deterioration at Present; Recovery from the Pandemic Shutdown Has Stalled and/or Is Regressing -- 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. Accordingly, comparative year-to-year change in the various March 2021 to March 2022 Money Supply measures against the heavily spiked year-ago activity tended to be depressed, against what otherwise would be the change versus the February 2020 Pre-Recession or Pre-Pandemic Trough (PPT), effectively the Base Circumstance, before the Pandemic emergency liquidity surge. Nov 26, 2013 Housing Starts delayed again. Current U.S. Economy Remains Far from a Full Recovery A new analysis will follow with preliminary April 2023 numbers late this coming week. March 2023 activity versus the February 2020 Pre-Pandemic Trough for the newly redefined (post-May 2020) headline M1 (now including Savings Deposits, at about 92% of M2) was up by a headline 375.8%, albeit on a nonsensical, not comparable and inconsistent basis, down from 385.4% in February. 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. That also was in context of a deepening shortfall against its Pre-Pandemic Peak by 1.46% (-1.46%) in 1q2023, versus a 1.22% (-1.22%) shortfall in 4q2022. At present, full economic recovery is not likely until well into 2024 or after. P E N D I N G .. P O S T I N G S Monday, May 1st, the Census Bureau releases March 2023 Construction Spending (10:00 a.m. Noted frequently here and discussed subsequent to earlier FOMC Meetings (March 22nd was the last), little has changed: The Federal Reserves Federal Open Market Committee (FOMC) hiked the targeted Federal Funds Rate March 22nd by the expected 0.25%, to a 15-year high level of 5.00%, hoping still to induce an imminent Economic Recession, which otherwise already had been in play and deepening for some time, due to earlier rate hikes. Headline March 2023 CPI-U annual inflation eased to 5.0%, from 6.0% in February, again, due to the relative easing of March 2023 energy prices against the oil and gasoline price spikes triggered by the year-ago by Russian invasion of the Ukraine. Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. -- 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. John Williams, Fundamentals Could Not Be Stronger for Gold and Silver, nor Weaker for the U.S. Dollar and Stocks, Despite Fed or Market Nonsense to the Contrary Republishing our charts: Permission, Restrictions and Instructions (includes important requirements for successful hot-linking) Reserves jumped by a dominant 7.1% in the month, which would speak to new money creation, while the Currency in Circulation component gained by 0.6% month-to-month, to a new historic high. Sales declined 22% from one year ago. The renewed monthly decline followed a 13.8% monthly jump in March, the first monthly gain since January 2022. 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. -- 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. Having largely nonfunctional Executive and Congressional branches of the U.S. Government does little to help stabilize the domestic Economy or Inflation. 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. Per the NAR Press Release, Existing-home sales retreated 2.4% in March to a seasonally adjusted annual rate of 4.44 million. The FOMC announced in its March 22nd Press Release: Recent indicators point to modest growth in spending and production. 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. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%.
Hyperbole In Atticus Closing Argument,
What Happened To Eve Russo Wfmz,
Francis Jacob Wozniak,
Articles S
