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Thereafter, an Expansion is in place until the next formal Peak, which, the NBER does time. (16) April 3rd (Census Bureau) February 2023 Real Construction Spending) - Despite the usual upside revisions to the prior two months of reporting, February 2023 Real Construction Spending showed its 17th straight month of year-to-year decline (down by 9.5% (-9.5%) from February 2022) [see Note (4)], with First-Quarter 2023 activity track for its fourth consecutive quarter-to-quarter decline, and its sixth consecutive quarterly year-to-year decline. PLEASE NOTE: In 10 days (March 24th), this Retail Sales Series will undergo an annual benchmark revision. Internationally, these activities are more broadly referred to as the shadow economy. Despite political hype to the contrary, such is helping to accelerate the pace of domestic Inflation. (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%). We thank Cass Information Systems for sharing their survey information. 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).. The Fed will release the headline April 2023 Money Supply and Monetary Base data at 1:00 p.m. (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. 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. Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. Please contact johnwilliams@shadowstats.com for further details or any questions. He believes the economy has collapsed, based upon his calculations on economic. That said, again, Fiscal Years 2021 and 2022 (FY 2021, FY 2022, FY 2023) circumstances and prospects have continued to deteriorate meaningfully, at an accelerating pace, from conditions at the end of FY 2020 (see the next paragraph), exploding anew into the still unfolding, disastrous FY 2023. April 2020 Pandemic/Economic Trough Revised Lower by 5.1% (-5.1%) In the charts to the right we show two SGS-Alternate CPI estimates: One based on the pre-1990 official methodology for computing the CPI-U, and the other based on the methodology which was employed prior to 1980. Suddenly, their model stopped working, and they asked me if I could fix it. Permits up strongly but it's all apts inSouth. He received an A.B. (18) March 21st to 22nd (FOMC). Nonetheless, January 2021 CPI-U Annual Inflation Hit a Soft, Ten-Month High of 1.4%, Boosted by Gasoline Prices, but Constrained by Mixed Food and Core Inflation Informal Economy Sizes. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living. Effectively fully surveyed, Permits were down by a deepening, seasonally adjusted year-to-year drop of 24.8% (-24.8%) in March 2023, against a revised, narrowed 16.5% (-16.5%) [previously a 17.9% (-17.9%) February decline]. 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. 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. 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. For the month of February 2023, the real Deficit deepened to -l04.6 billion. 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. Where Pandemic Forced the Shutdown of the U.S. Economy in March 2020, FOMC Rate Hikes Already Had Strangled Business Activity John Williams, founder of Shadow Government Statistics, . View Download Excel CSV File Last Updated: April 13th, 2023. The SGS-Alternate GDP reflects the inflation-adjusted, or real, year-to-year GDP change, adjusted for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting. 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. The extent of these effects is uncertain. 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. (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. 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. Surging Monetary Base, Reserves and Currency Indicate Intensifying Systemic Problems This Masked Accelerating Flight-to-Liquidity in Traditional M1 from Non-M1 Components of M2 U.S. Dollar Collapse Accelerates During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies. Again, full detail follows in the DAILY UPDATE e-mails and in pending No. 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. SHADOWSTATS SUBSCRIPTIONS Economic and financial issues raised here are reviewed more extensively, along with exclusive graphs, and expanded economic, financial market and monetary assessment in subscriber-only Commentaries [monthly going forward], and more frequently on a timely basis in the subscriber-only e-mails of daily changes in the DAILY UPDATE (as the news breaks, see the prior paragraph). 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. 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. The Real Housewives of Atlanta The Bachelor Sister Wives 90 Day Fiance Wife Swap The Amazing Race Australia Married at First Sight The Real Housewives of Dallas My 600-lb Life Last Week Tonight with . The latest Economic and Inflation releases were covered earlier in the Opening Section of this DAILY UPDATE. Mind the Aftershocks: Post-Tantrum Market Calm Unnerves Traders . Commentary No. In context of the ever evolving financial, inflation and economic circumstances, ShadowStats should post Commentary No. Republishing our charts: Permission, Restrictions and Instructions (includes important requirements for successful hot-linking), Analysis Behind and Beyond Government Economic Reporting, This material is provided under the 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. Williams told David Lin, anchor for Kitco News, that the true headline . 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. Public Comment on Inflation Measurement & the Chained CPI-U, Update 2016Update 2015Hyperinflation 20142014 Second InstallmentDeficit Reality. 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. In the end, the Fed has little choice but to support the banks and to let inflation run its course. (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. Theoretically Equivalent Third-Quarter 2020 GDP (Product) and GDI (Income) Rebounded by Varying Annualized Quarterly Gains of 33.1% and 25.5%, Still Holding Far Shy of Economic Recovery "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. 2021 Social Security Cost of Living Adjustment (COLA) Could Spike to a 40-Year High, Based on Potential Third-Quarter 2021 CPI-W Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. 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. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.. 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. Please click on a chart or link to view details. The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. Chances Are Reduced for Moderating Extreme Monetary and Fiscal Policies ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. Full-Year 2020 Annual GDP Decline of 3.5% (-3.5%) Was the Deepest Since the 1946 Post-World War II Economic Reset Separately, though, the Fed also purportedly has been reducing its balance sheet assets, which should slow or cut the Money Supply growth and inflation. Reporting Accordingly, ongoing massive Fiscal and Monetary Stimuli will be needed, and likely will expand into 2024/2025, irrespective of the FOMCs pronounced tightening. As demonstrated in recent decades, FOMC stimulus likely will remain in play, as targeted by the FOMC, primarily, in order to prevent a collapse in the Banking System, or to magnify liquidity in the Banking System, which owns and controls the Federal Reserve, not to stimulate the Broad Economy, per se. 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. Shadowstats.comis a website that analyzes and offers alternatives to government economic statistics for the United States. ShadowStats postings of the June 2021 Commentary and before - back to 2004 - are open to all, accessible by clicking on Archives, at the bottom of the left-hand column of this ShadowStats homepage. 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. A prospering shadow economy makes official statistics (on unemployment, official labor force, income, consumption) unreliable. -- 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. Inflation is already in the double digits, according to ShadowStats' John Williams, and will still grow. Your Shadow subscription. 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 For those looking to subscribe, please go to the SUBSCRIPTION LINK at the upper left-hand corner of this Web page). 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. Including Commercial Aircraft, aggregate New Orders recovered pre-Pandemic levels in Third-Quarter 2020. (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. IMPORTANT: Commentary postings are advised directly to Subscribers by coincident e-mail, along with a direct link to the posted Commentary and any needed login detail. November New-Home Sales Collapsed by a Meaningful 11.1% (-11.1%) in the Month, On Top of Major Downside Revisions to Sales in Each of the Prior Three Months March 2023 New Home Sales gained by a headline, statistically insignificant 9.6% +/- 15.2% month-to-month, with a statistically insignificant year-to-year decline of 3.4% (-3.4%) +/- 12.7% for this near-term unstable series. 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). Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels Expanded Federal Reserve Accommodation Remains Likely Well Into 2023, Given the Increasingly Negative Outlook for Imminent U.S. Economic Recovery (9) April 14th, (Federal Reserve Board). 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. 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. A similar pattern is likely with the Census Bureaus May 1st release of March 2023 nominal Construction Spending, given the activity patterns and related needed inflation-adjustments already in play. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. Any solid developments in the ever-deepening U.S. Government Fiscal Crisis will be covered here in the SYSTEMIC RISK Section. At present, full economic recovery is not likely until well into 2024 or after. 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. Best Wishes -- John Williams. 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. 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. Adjusted for seasonal factors, the monthly decline was 3.8% (-3.8%), with the year-to-year drop at 3.6% (-3.6%). MARCH 2023 MONEY SUPPLY AND MONETARY BASE -- (April 25th, Federal Reserve Board [FRB], with ShadowStats Supplement). An informal economy (informal sector or shadow economy) is the part of any economy that is neither officially taxed nor monitored. Pandemic-Disrupted U.3 Unemployment Effectively Was 9.0% in November 2020, Not the Headlined 6.7% He received an A.B. In the past, there have been various estimates of the economic impact and the size of shadow economy in Australia by organisations such as the Black Economy Taskforce External Link and the Australian Bureau of Statistics (ABS). Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. Broadly, the aggregate Monetary Base had been in decline since hitting a peak in January 2021, but it has turned higher in the last several months. 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. 1461. Stock Indices Are At or Near All-Time Highs, Coming into the First Anniversary of the Pre-Pandemic Stock-Market Peaks and Subsequent Crashes 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). 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.]. An old friendthe late-Doug Gillespieasked me some years back to write a series of articles on the quality of government statistics. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. 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. 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 Yet, with the new Fed Funds Rate at a 15-plus-year high (since July 2007), the earlier FOMC rate hikes already are pummeling the economy, but again, not relieving inflation. Financial Market Turmoil Is Just Beginning, Key Monthly Economic Numbers Turned Negative Anew in Fourth-Quarter 2020 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. 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%. Annual growth in Payrolls has been slowing since February 2022. Jacinta Price named shadow minister for Indigenous Australians . 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. Holding Physical Precious Metals Remains the Best Hedge Against Coming Inflation and Market Turmoil, Deepening Economic Woes and Soaring Inflation Ahead ARCHIVES - VIEWING EARLIER COMMENTARIES. -- 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. (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. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. 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. Accordingly, the April 2021 to January 2023 growth rates here generally are shown against that February 2020 PPT, instead of year-to-year. FOMC action looms this week, amidst signs of a tanking Economy and a serious Inflation problem. November Industrial Production and Its Dominant Manufacturing Sector Showed Deepening Year-to-Year Declines, While the Mining Sector Showed a Narrowed Annual Plunge, Thanks to Rising Oil Prices -- 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 headline March 2023 Monetary Base, jumped by 4.7% month-to-month to a seven-month high, as the FOMC fed emergency funding into Reserve Balances with Federal Reserve Banks, at a time of systemic liquidity concerns. ET); Thursday, May 4th, the Census Bureau and Bureau of Economic Analysis release the March 2023 Trade Deficit (8:30 a.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. New Numbers Indicate the Economy Was in a Deepening Recession, Well Before the Pandemic Shutdown and Collapse Collapsed Oil Prices Still Suppressed November CPI and PPI Annual Inflation; Yet, Oil Prices Suddenly Are Surging Anew Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. Australia's Government Strengthens Grip With By-Election Win. 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. 1461.