- by New Deal democrat
Normally on the Monday after the employment report, I do a deeper dig into its details. But today that seems a little quaint, sort of like rhapsodizing about the Roaring 20’s the week after the great Crash of 1929.
Lots of other people, e.g., Bill McBride, have looked into their crystal balls and seen a recession coming, or at least heightened risk. No doubt that is true. But I am a data nerd, and my mission is to pay attention to what the actual hard data says.
Over the weekend on Seeking Alpha I was asked if I could “reassure” people that the economic indicators - even high frequency ones - would telegraph a recession before it began. My response was that with exogenous events, in particular an event caused by a single human actor, nothing could be “assured.” For example, I wrote that “Given [T—-p‘s] mercurial record, I would give not more than 50% odds that these tariffs will remain substantially in place for more than a month or two;” but that the weekly data like new jobless claims and retail spending, and even daily updated “hard” data such as withholding tax payments and restaurant reservations would give almost instantaneous warnings that producers and consumers had started to pull back.
So, in view of the fast moving events, my plan is to add a focus on two general sources of information.
First, I plan to include daily updates on tax payments and restaurant reservations, as well as updates on Tuesday as to weekly retail spending, in addition to the Thursday updates on jobless claims that I already do.
Secondly, the five regional Feds that issue monthly manufacturing reports before the month is over - New York, Philadelphia, Richmond, Kansas City, and Dallas - also issue similar updates about the services economy. I have not written about these before because they appear to be coincident indicators, and you know I focus on what is ahead, not what has just happened. But at least for this month, I plan on highlighting these as well, because they will be among the very first “hard” indications that consumption of services is taking a hit. The NY Fed will be the first report, on the 16th, followed by Philly and Richmond on the 22nd, Kansas City on the 25th, and Dallas on the 29th.
Between the above daily, weekly, and intramonth reports, we should have as close to a real-time report of the tariffs’ effects on the economy as possible.
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Edited to Add: I happen to think the Roberts Court has handed potential plaintiffs challenging the legality of these tariffs a theory that is a very potent weapon. I hope to explain that tomorrow.
