They should look no further than the Macroeconomic Adviser's monthly nominal GDP series. This is a monthly indicator of total current dollar spending or aggregate demand in the United States. It shows for August that aggregate spending declined at an annualized rate of decline of 1.69%. More worrying, though, is that there is a downward trend in aggregate spending over the entire year. This downward trend is consistent with the quarterly forecasts of the Survey of Professional Forecasters that show a drop in the NGDP forecast. Here is monthly NGDP (click to enlarge):
Now these numbers only go through August. I suspect all the recent QE2 talk--and its effect on nominal expectations and thus on current spending--may have to some extent arrested this downward trend in NGDP. Still the Fed should not let its guard down come the November FOMC meeting.
cJeffrey Sachs offered up a scathing analysis of traditional Keynesian (non-targeted) fiscal stimulus on Charlie Rose last nite: http://www.charlierose.com/view/interview/11925
ReplyDeleteLast week's ECRI declaration of an unavoidable NBER defined recession commencing in Sept/Oct will put pressure on Congress to act rashly. Media piling-on can assault commerce/consumer confidence and make this self-fulfilling.
My own TRENDLines Recession Indicator gauged Sept GDP @ a 2.0% pace & projects 1.7% for October, with a low point of o.8% in April 2012.
TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm