The big news carried in The Daily Doom today was recession after recession and inflation after inflation. They’re both back (or “back to back”), and boy are they mad! This year’s big predictions on The Great Recession Blog appear to be lining up to start tearing things up this week as a nice little gooey Valentine’s surprise that ain’t yo’ mama’s box o’ chocolates!
Suddenly recession is no longer receding from view
They have invented a new term for the recession that I said back in the summer of 2021 would begin at the start of 2022. You know: the one the NBER peculiarly refused to officially call a “recession” after two full quarters of declining GDP last year. Well, now people are grouping the big “not-recession” that happened back then … with what is happening now by calling the whole mess a “rolling recession.” I referred to this monstrosity as something that would eventually be considered a “double-dip recession” — same concept.
Back in October when Q3 2022 real GDP was reported to have finally risen again, saving us from certain proclamation of a recession, I wrote the following:
If we go up from where total GDP sits now, the recession is over, if you are inclined to call it a “recession” as we boldly would have in the old days. You could say it is over now in that it has recovered; however, if it goes right back down again (making this quarter the fluke and not a move that held) then it would typically be called “a double-dip recession,” especially since it hasn’t recovered to a new high yet, but just to even.
However, no one calls anything as it is anymore — bad news is good news if you’re an investor; men are women; cats are mice [and maybe mice are men] … you know. So, I won’t hold my breath for that truthful declaration to be made, even if total GDP does go back down. Instead, those who declare these things are likely to side with the vast majority that stands far away from me, as though I apparently stink like a pig….
“GDP Stands for One “GROSS Domestic Pig” During Election Season“
Low and behold, some mainstream financial news writers now are actually starting to side with me, as it turns out:
Here’s where the jobs will be during the rolling recessions
Recession-like conditions rolling through the U.S. economy are likely to cause more ripples through an otherwise strong jobs market.
“Rolling recessions” has become a popular term these days for what the U.S. has faced since a slowdown that started in early 2022. The term connotes that while the economy may not meet an official recession definition, there will be sectors that will feel very much like they are in contraction.…
Various dominoes already have fallen during the rolling-recession period.
Housing entered a sharp downturn last year, and the widely followed manufacturing indexes have been pointing to contraction for several months. In addition, the most recent senior loan officer survey from the Federal Reserve noted significantly tighter credit conditions, indicating a slowdown is hitting the financial sector….
For job seekers, the phrase “rolling recessions” means that it will be easier to get employment in some industries, while others will be tougher.
Uh huh. Call it a “rolling recession” or a “double dip recession;” it amounts to the same beast “that started in early 2022.”
As for the labor market, which I have repeatedly said — against the flow of all other reporting — is far from healthy but is actually “weak” and is masking the recession (causing the NBER not to officially call it a recession because “labor is tight,” there is now first evidence emerging of some cracking there in financial reporting, too:
Despite the seeming healthiness of the labor market, many economists think a broader recession is still ahead.
Yes, now it is just “seeming” healthy and we are a talking about a “broader” recession, not a second recession. They’re starting to catch up, Folks. They’re not there yet, but that’s the first glimpse that some are thinking labor may not be all it seems and may be masking the reality of a recession that is now becoming a broader recession. I’ve said misunderstanding of the tightness in the labor market will prove to be the Fed’s great blind spot this year. So, watch for this story to continue to reveal its true colors. This was the first hint I’ve seen that such realization is emerging.
The inflation equation is what needed adjustments
Oh, do you remember those inflation figures that I was questioning based on the “seasonal adjustments?” Yeah, it turns out the “seasonal adjustments” accidentally ran the wrong way so inflation was a little worse in the last few months than stated and has just been revised accordingly, which also means real GDP (the measure that factors inflation out, which we go by for determining recessions) was marginally lower than stated, too:
CPI Just Got Revised Higher for October through December. The Revisions Take a Bite out of “Disinflation” Hoopla
On Friday, the Bureau of Labor Statistics released its annual revisions to the Consumer Price Index for December, with some revisions going back to 2018….
What was actually revised were the seasonal adjustments….
Surprise, surprise.
The revisions for the December month-to-month readings were all to the upside, including: Overall CPI (CPI-U), old -0.1%; new +0.1%. So there goes that. “Core CPI” (without food and energy), old +0.3%; new +0.4%. Services CPI, old: +0.6%; new +0.7%. This is where nearly two-thirds of consumer spending goes. And it is red hot.
In addition, the readings for October and November were also revised up, taking a bite out of the “disinflation” scenario….
October, November, and December … were all revised up….
The services CPI was revised to a red-hot +0.7% for December
