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. 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]. 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. 1461. Tourism Statistics - Austrade Shy of a near-term happy resolution to the Russia-Ukraine War, the circumstance only has exacerbated the ShadowStats Hyperinflation pre-Russia-Ukraine War outlook of the last year or so, where: Despite recent relative weakness in gold prices and related Central Bank or other market machinations, the ShadowStats broad outlook in the weeks and months ahead has remained for: (1) A continuing and renewed deepening (potentially hyperinflationary) U.S. economic collapse, reflected in (2) Continued flight to safety in precious metals, with accelerating upside pressures on gold and silver prices, (3) Mounting renewed selling pressure on the U.S. dollar, against the Swiss Franc and other traditionally stronger currencies, and (4) Despite recent extreme Stock Market volatility and current near-record high levels in the popular U.S. stock-market indices, high risk of major instabilities and heavy stock-market selling continues, complicated by ongoing direct, supportive market interventions arranged by U.S. Treasury Secretary Yellen, as head of the President's Working Group on Financial Markets (a.k.a. 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. A Review-Preview of 2020 into 2024, it will incorporate all the latest economic details. This is because he states that these numbers have been manipulated over the past 25 years for nefarious political reasons. We thank Cass Information Systems for sharing their survey information. -- 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. 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. 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).. 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. 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. Real year-to-year growth patterns were kinder to the fourth-quarter GDP, with year-to-year growth increasing from 0.88% to 1.57%, and with the gain against Pre-Pandemic Peak Activity increasing from 5.03% in 4q2022 to 5.31% in 1q2023. The U.S. banking system is sound and resilient. Please note with the ALTERNATE DATA Tab, that the Money Supply annual growth rates after February 2021 instead are against the February 2020 Pre-Pandemic Level not year-to-year (although both measures are plotted in the subscriber-only graphs). The pattern of current activity remains consistent with a deepening, albeit not formally recognized Economic Recession. One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. That said, expanded Federal Government Deficit Spending continues, currently at the Debt Ceiling. If you are not a Subscriber, and wish to be, see the next paragraph. 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. The service costs $49.95 for a single month, $39.95 per month for a three-month subscription and $34.95 per month for a 12-month subscription. Despite Happy Headline Gains in January 2021 Real Retail Sales, Production and Construction, the Underlying Payroll Employment Numbers Tell the Opposite Story Having largely nonfunctional Executive and Congressional branches of the U.S. Government does little to help stabilize the domestic Economy or Inflation. Such Was the First Annual Gain in Freight Activity Since November 2018, When Excessive Fed Tightening Was Being Used to Constrain Consumer Liquidity and Domestic Economic Growth Severely Negative Annual Revisions to Industrial Production Mean the Economy Was in Recession Well Before the Pandemic Hit November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity 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]. Momentum of Fourth-Quarter Data Suggests a First-Quarter 2021 GDP Contraction, As the Pandemic and Political Tumult Take on Negative New Dimensions 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 The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 Including Commercial Aircraft, aggregate New Orders recovered pre-Pandemic levels in Third-Quarter 2020. (6) April 24th (Census Bureau). 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. Despite a small monthly narrowing in the headline March 2023 Unemployment Rate, details remained consistent with an unfolding recession. 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. 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). New Numbers Indicate the Economy Was in a Deepening Recession, Well Before the Pandemic Shutdown and Collapse Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded, not reduced. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. Please note: Our Data Download is currently only providing the 1980-Based numbers, but 1990-Based numbers will be introduced shortly. The initial headline annualized quarterly estimate of inflation-adjusted First-Quarter 2023 Real Gross Domestic Product (GDP) showed doubly negative patterns of activity. Please click on a chart or link to view details. The initial headline annualized quarterly estimate of inflation-adjusted First-Quarter 2023 Real Gross Domestic Product (GDP) showed doubly negative patterns of activity. Despite Talk of Tightening in 2022 or 2023, FOMC Is Easing Anew in Its Latest Actions, Benchmarked Industrial Production Revised Sharply Lower; Both Manufacturing and Mining Were Hit Hard 'Displaced workers' not accurately portrayed in economic data: Shadow January 2021 Producer Price Index Monthly Inflation Hit a Record, 10-Year High India's Jobless Rate Hits a Three-Month High of 7.8%, CMIE Says. Narrowing Annual Declines in October and November Payrolls Stalled at 6.0% (-6.0%), But the Year-to-Year Drop in December 2020 Payrolls Deepened to 6.2% (-6.2%) INFORMAL ECONOMY SIZE AS A PERCENTAGE OF GDP. (7) April 20th (National Association of Realtors NAR). Consider -- Despite significant Recovery off the Pandemic-Driven Economic Trough of April 2020, the February 2023 Payroll Employment has recovered its February 2020 Pre-Pandemic/ Recession Peak, despite indications of a renewed slowdown. Those numbers are adjusted for inflation, using the Construction Producer Price Index. 1438, subsequent missives including particularly No. ShadowStats and the 'Alternate Inflation' Myth - US News -- 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. Holding Physical Precious Metals Remains the Best Hedge Against Coming Inflation and Market Turmoil, Deepening Economic Woes and Soaring Inflation Ahead 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. Those details are posted and graphed on the Alternate Data Tab. 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. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%. 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. Note also that the period of time in which the blue line departs from the CPI transformation is 2007-2009, a time in which inflation mania was at its peak. SHADOWSTATS DAILY UPDATE - May 1st to May 3rd A major Subscriber-Only e-mail update is pending for later today. Yet, Fourth-Quarter 2020 New-Home Sales Contracted, as Did Real Retail Sales, Suggestive of Consumers Facing Intensifying Pandemic and Liquidity Issues -- 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. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). Permits up strongly but it's all apts inSouth. 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. (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.] By its very nature, the shadow economy is difficult to measure. 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. Consider that March 2023 Basic M1 (Currency plus Demand Deposits [Checking Accounts]) gained anew, month-to-month, still holding at 120.5% above, albeit somewhat shy of the peak 122.5% above its February 2020 Pre-Pandemic level. Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. The latest Economic and Inflation releases were covered earlier in the Opening Section of this DAILY UPDATE. Risk of Hyperinflationary Economic Collapse Has Accelerated With Democrats Taking Control of Both the White House and Congress Headline March 2023 Producer Price Index (PPI) annual inflation dropped sharply from 4.9% in February 2023 to 2.8% in March 2023, due to the relative easing against the extreme oil and gasoline price spikes triggered by the year-ago Russian invasion of Ukraine. Again, full detail follows in the DAILY UPDATE e-mails and in pending No. 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 (15) April 5th (Census Bureau, Bureau of Economic Analysis - BEA) - Following a record 2022 Real Annual Merchandise Trade Deficit, the January and February 2023 Deficits deepened successively to their worst readings since October 2022, but narrower than in First-Half 2022. ShadowStats will re-address these numbers at that time. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. 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 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]. Consumer Liquidity, Depression, Money Supply. The best Honkai: Star Rail Trailblazer build is all about . 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 Money Supply Charts - Shadowstats.com (I) - BOTTOM LINE COVERAGE: A ninth, consecutive FOMC Meeting Interest Rate hike is expected Wednesday, yet the U.S. Economy already is in intensifying Recession. Further definition is provided in our CPI Glossary. Unemployment. 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. Year-to-year Core PPI Inflation (net of Food and Energy) eased from 5.1% to 4.3%. (13) April 12th (Bureau of Labor Statistics). 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. 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. 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 At the same time, the FOMC keeps hiking interest rates, in order to kill economic activity that is neither overheating nor driving the inflation, despite the publicly expressed claims of the FOMC and its Fed Chairman. ShadowStats' John Williams: Why inflation now is really 13. - YouTube ARCHIVES - VIEWING EARLIER COMMENTARIES. 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. [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 .] Economic Issues No. 30 -- Hiding in the Shadows : The Growth of the To ensure that our results are as robust as possible we use multiple sources to estimate its overall size, including data from the ABS, the Black Economy Taskforce (BETF), and the Australian Criminal Intelligence Commission (ACIC). 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. Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. (12) April 13th (Bureau of Labor Statistics). 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. Yet hard Money Supply numbers through the deliberately slow release of the March 2023 detail, show minimal impact, presently still expanding in the most-liquid, inflation-driving Basic M1 (Currency and Demand Deposits). 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% I also have provided testimony before Congress (details here). March 2023 New Residential Construction continued in statistically significant annual year-to-year collapse for both Building Permits and Housing Starts. L A T E S T .. N U M B E R S -- See the later SYSTEMIC RISK SECTION -- FEDERAL RESERVE for the current FOMC coverage and detail of February and early March 2023 Monetary Conditions. The projected continuous rise of the debt-to-GDP ratio indicates that current policy is unsustainable. Allowing for the 2021 Unfunded Liabilities, reflected here, that Debt-to-GDP ratio already was 552% at the end of Fiscal Year 2021. The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started ShadowStats.com (Shadow Government Statistics) in 2004. 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. The newsletter is published as part of my economic consulting services. For those looking to subscribe, please go to the SUBSCRIPTION LINK at the upper left-hand corner of this Web page). That said, there have numerous stories in recent months of misreported, headline employment gains. -- 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. The original Money Supply measure, Basic M-1 is defined as Currency plus Demand Deposits (checking accounts). Revised year-to-year growth slowed to 0.88%, from 0.91% and an initial estimate of 0.96%, versus 1.94% in 3q2022. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. 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]. 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. For the most-liquid Basic M1 Money Supply measure in March 2023, dollar levels and growth levels moved higher against the Pre-Pandemic Trough, still suggestive of massive mounting, not easing inflation pressures. 1461. For the month of February 2023, the real Deficit deepened to -l04.6 billion. Explored in the pending Commentary, the U.S. economy is and has been much weaker than advertised, not overheating, and the soaring inflation, which is much worse than headlined, again, primarily is being driven by the Feds excessive Money and Liquidity creation, not by an overheating economy, in a policy conundrum previously noted here by ShadowStats. Shadow Government Statistics - RationalWiki A new analysis will follow with preliminary April 2023 numbers late this coming week. 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. Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. -- 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. Underlying Economic and Labor Numbers through November Indicate Contracting or Flattening Fourth-Quarter 2020 GDP, Well Shy of Economic Recovery [Posted May 1st, 1:00 a.m. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. 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. Gross Domestic Product. Shadow 200 RQ-7 Tactical Unmanned Aircraft System - Army Technology Severe, U.S. Dollar-Debasing Inflationary Pressures from Existing, Extreme Monetary and Fiscal Policies Are About to Get Much Worse 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. 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. 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. (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. Williams told David Lin, anchor for Kitco News, that the true headline . In terms of quarter-to-quarter change, despite a sharp monthly decline in March 2023, those January and February auto sales pulled relative real 1q2023 activity up at an annualized quarterly pace of 3.10%, following respective consecutive annualized quarter-to-quarter declines of 3.29% (-3.29%) and 2.35% (-2.36%) in 4q2022 and 3q2022. Walter J. On Top of an Upside Revision, Housing Starts Gained 4.9% in the Month; This Was Not Statistically Significant at the 90% Confidence Interval 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). While shifting focus to the troubled banking system, FOMC hopes and activities still are concentrated on some way of triggering a Recession, again, ostensibly to help contain inflation otherwise being driven by a non-existent overheating economy, where the mounting inflation pressures primarily are due otherwise, to continuing, extreme levels of Money Supply creation. Use the drop-down menu below to find highlights and links to Commentaries from the present and past months. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. Here is how the March 2023 Money Supply numbers shaped up. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels 1461 soon. Inflation is already in the double digits, according to ShadowStats' John Williams, and will still grow.
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