Jacinta Price named shadow minister for Indigenous Australians . U.S. Dollar Collapse Accelerates January 2021 Annual Growth in Money Supply M1 and M2 Surged to Respective Record Highs of 69.7% and 25.8%, Despite Some Downside Benchmark Revisions The Shadow TUAS can carry payloads up to 27kg (60lb) including sensors and electronic warfare systems. Those numbers are adjusted for inflation, using the Construction Producer Price Index. 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. Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. 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. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. 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. The original Money Supply measure, Basic M-1 is defined as Currency plus Demand Deposits (checking accounts). By its very nature, the shadow economy is difficult to measure. (5) April 25th (Census Bureau). 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. (14) April 7th (Bureau of Labor Statistics BLS, and ShadowStats.com). Alternate Gross Domestic Product Chart. There Is No V-Shaped Recovery The pattern of current activity remains consistent with a deepening, albeit not formally recognized Economic Recession. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. 1461. 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). 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). An old friendthe late-Doug Gillespieasked me some years back to write a series of articles on the quality of government statistics. As Tim notes, this is a gobsmacking error. The initial headline annualized quarterly estimate of inflation-adjusted First-Quarter 2023 Real Gross Domestic Product (GDP) showed doubly negative patterns of activity. Congress keeps delaying U.S. Government Shutdowns, with continual increases in and extensions to the Debt Ceiling, amidst ongoing political games. EXPANDED SHADOWSTATS ALERT: - Intensifying Risks of a Highly Inflationary, Major U.S. Economic Downturn. Those details are posted and graphed on the Alternate Data Tab. The recent string of extreme FOMC rate hikes certainly has not. December 2020 Real Retail Sales Declined for the Third Straight Month, and Fourth-Quarter 2020 Activity Relapsed into Quarterly Contraction Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data Series. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). ET, May 23, 2023. That said, in practice, such should be a major economic consideration for the FOMC and the Administration, going forward, as they hike Interest Rates, reduce their Balance Sheet and look to break the Budget Deficit Federal Debt Ceiling. Measured against its Pre-Pandemic level, 4q2022 Real GDP had gained 5.03% [previously 5.06% and 5.11%]. 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. 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. I also have, This material is provided under the ShadowStats.com. For those looking to subscribe, please go to the SUBSCRIPTION LINK at the upper left-hand corner of this Web page). The Committee will closely monitor incoming information and assess the implications for monetary policy. -- 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. This Masked Accelerating Flight-to-Liquidity in Traditional M1 from Non-M1 Components of M2 That said, there have numerous stories in recent months of misreported, headline employment gains. Consumer Liquidity, Depression, Money Supply. An Increasing Number of Unemployed People Were Misclassified as Employed; Corrected December Unemployment Would Have Jumped, Instead of Holding at 6.7% 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. ShadowStats publishes "alternate" measures of inflation and pretends to do so by employing the methods the statistics bureau used to employ, that is, by ignoring the fact that we consume . January 2021 Producer Price Index Monthly Inflation Hit a Record, 10-Year High 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. Full-Year 2020 Annual GDP Decline of 3.5% (-3.5%) Was the Deepest Since the 1946 Post-World War II Economic Reset 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 . Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. 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. (8) April 18th, (Census Bureau). (13) April 12th (Bureau of Labor Statistics). 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. Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. 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]. 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. Full-Year 2020 Existing- and New-Home Sales Were Highest Since 2006 The dotted lines are the overlayed series created from the official CPI statistics. 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. Gross Domestic Product. -- Despite recent GDP Benchmark Revisions and current gimmicked reporting, key Economic Series show not only that the Pandemic-driven Economic Collapse was worse than headlined, but also that the still-unfolding Recovery has been much weaker than indicated. The Committee is strongly committed to returning inflation to its 2 percent objective. Walter J. 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 Where January 2021 Year-to-Year Manufacturing Contracted by 1.0% (-1.0%), It Also Contracted by 1.8% (-1.8%) from January 2019, Two Years Ago Our estimates of the tax effect . 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. Here are the results. Despite a small monthly narrowing in the headline March 2023 Unemployment Rate, details remained consistent with an unfolding recession. U.S. Dollar. Yet, Fourth-Quarter 2020 New-Home Sales Contracted, as Did Real Retail Sales, Suggestive of Consumers Facing Intensifying Pandemic and Liquidity Issues March 7th builds: Power up the pink archer. 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 Collapsed Oil Prices Still Suppressed November CPI and PPI Annual Inflation; Yet, Oil Prices Suddenly Are Surging Anew -- 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. B U S I N E S S .. C Y C L E -- RECESSION-DEPRESSION TIMING Updated September 21, 2021 [Full review and update pending in No. 1461 will review the underlying GDP, GDI and GNP numbers. Primers & Reports. In the end, the Fed has little choice but to support the banks and to let inflation run its course. Reporting Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. Best Wishes -- John Williams. 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. FOMC action looms this week, amidst signs of a tanking Economy and a serious Inflation problem. Your Shadow subscription. 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. He received an A.B. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Please click on a chart or link to view details. Where Pandemic Forced the Shutdown of the U.S. Economy in March 2020, FOMC Rate Hikes Already Had Strangled Business Activity "John" Williams was born in 1949. Public Comment on Inflation Measurement & the Chained CPI-U, Update 2016Update 2015Hyperinflation 20142014 Second InstallmentDeficit Reality. Where Commercial Aircraft account for about 32% of total orders, the remaining 68% includes everything else, ranging from automobiles to computers. -- 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. The FOMC announced in its March 22nd Press Release: Recent indicators point to modest growth in spending and production. HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). 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. 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. 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. 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. Contact us to discuss your needs. (8) April 18th, (Census Bureau). Chairman Powell backed off talk of mandatory, continuing FOMC Rate Hikes to kill Inflation, by killing the economy with high Interest Rates, noting that perhaps the Banking Crisis might slow the economy, and help to contain inflation. Momentum of Fourth-Quarter Data Suggests a First-Quarter 2021 GDP Contraction, As the Pandemic and Political Tumult Take on Negative New Dimensions 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 Separately, the inflation issue is complicated by independently rising gasoline prices, not by any overheating economy! 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 . 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 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. 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. (18) March 21st to 22nd (FOMC). 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. -- 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. 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 Australia's Government Strengthens Grip With By-Election Win. For example, they . Suddenly, their model stopped working, and they asked me if I could fix it. Shadowstats.com is a website that claims that the government does a piss poor job of keeping track of certain statistics. (7) April 20th (National Association of Realtors NAR). (2) April 27th (Bureau of Economic Analysis), also see Note 17. We thank Cass Information Systems for sharing their survey information. 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. ShadowStats will re-address these numbers at that time. 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. 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. -- Headline March 2023 U.3 and U.6 Unemployment of 3.50% and 6.68% notched lower from respective three- and six-month highs of 3.57% and 6.80% in February, but held above January 2023 levels. 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. 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. 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. 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]. 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). 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.] 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. Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. That revised February inflation of 16.1% was much higher than the year-to-year nominal growth of 5.3% in parallel February Construction Spending, resulting in an unrevised, inflation adjusted, real year-to-year decline of 9.5% (-9.5%) in February 2023 [See extended comments in later Note (16)]. 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. 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. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. -- The Feds Balance Sheet Reduction formally began in June 2022 and should have begun to relieve some Money Supply pressures on Inflation at that time, in theory. Against its Pre-Pandemic Trough (PPT), ShadowStats March 2023 Basic M1 (Currency plus Demand Deposits [83% of the old pre-May 2020 M1]) moved higher to 120.5%, from a revised 119.8% (previously 119.3%) in February, still shy of its historic peak of 123.2% in August 2022. Near Record Growth of Currency in Circulation Foreshadows Inflation Risk With a further quarter-point rate hike expected out of this weeks May 2nd to 3rd FOMC Meeting, following nine consecutive FOMC Meeting rate hikes (0.25% at the last three meetings, 0.50% and 0.75% earlier), the U.S. Central Bank appears intent on using surging interest rates to drive the U.S. economy into the ground. 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. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government's statistical agencies. 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). ET); Thursday, May 4th, the Census Bureau and Bureau of Economic Analysis release the March 2023 Trade Deficit (8:30 a.m. That revised February inflation of 16.1% was much higher than the year-to-year nominal growth of 5.3% in parallel February Construction Spending, resulting in an unrevised, inflation adjusted, real year-to-year decline of 9.5% (-9.5%) in February 2023 [See extended comments in later Note (16)]. Having largely nonfunctional Executive and Congressional branches of the U.S. Government does little to help stabilize the domestic Economy or Inflation. 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. In parallel, the year-to-year pace of March 2023 ShadowStats Alternate CPI inflation eased to 12.9% in March 2023, from 14.1%, from in February 2023. (12) April 13th (Bureau of Labor Statistics). 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. The Federal Reserve Overhauled Its Money Supply Reporting, Redefining Traditional M1 from 34.8% to 93.4% of a Not-Redefined Total M2 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).

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