JWSGS - APRIL 2005 EDITION
Issue Number Six
April 6, 2005
_____
RECESSION AND INFLATION TO DOUBLE-TEAM THE MARKETS
ALTERNATE OFFICIAL PAYROLL NUMBERS SHOW
ONLY 69% OF OFFICIAL JOBS GROWTH
MONEY SUPPLY GROWTH READY TO GENERATE RECESSION WARNING
Contrary to conventional Wall Street wisdom, high inflation and recession can co-exist in a very uncomfortable and financially debilitating environment. Inflationary recession is about to replace the stagflation of the last couple quarters.
Inflation has completed its regular, year-end, politicized bottom-bouncing, with both the CPI and PPI set to hit new multi-year highs in the next several months. Intensifying dollar weakness and high oil prices are primary factors driving this inflation, not strong demand for products and services.
At the same time, a slowly increasing weakness has been evident in many economic indicators, and the first formal recession signal from the SGS early warning system appears ready to kick in within the next couple weeks. A recession should be underway by early in third-quarter 2005. Driving the economic downturn is the lack of any actual inflation-adjusted income growth among consumers.
In something of a negative self-feeding cycle, the intensifying business contraction will increase selling pressure on the U.S. dollar. Mounting flight from the U.S. currency will tighten liquidity in the financial markets, generally pushing market interest rates higher and equity prices lower. The liquidity squeeze will tend to accelerate the economic contraction.
While a number of the better leading indicators of business activity have been soft of late, the smoothed, inflation-adjusted, annual money supply growth rates have slowed enough to generate a recession warning, once the March average data have settled in. The purchasing managers new orders index continues to inch towards generating a similar signal that may be in place at the end of April. These will be the first of what likely will be a series of recession warning signals, as an economic downturn moves onto the forecast horizon.
Signals from the good-quality (and some of the other) leading indicators can be combined to generate early warnings of major upturns and downturns in business activity. The growth levels that trigger a recession alert remain close for most indicators and virtually are in place for the money supply.
What will be signaled is a protracted period of contracting commercial activity beginning early third-quarter 2005. While the downturn will be reflected in vital indicators such as federal tax receipts, corporate profits, payroll employment and industrial production, GDP growth would slow but not necessarily turn negative, unless the contraction were particularly severe. A severe downturn, however, is a good possibility. The early warning system will be detailed next month.
As to current economic reporting, March payrolls were predictably weak, and added evidence of regular over-reporting is discussed in the "Reporting Focus." Fourth-quarter annualized real GNP growth came in 0.4% below the GDP, signaling ongoing damage from the United States' net-debtor status. The retail sales benchmark revision also suggested that recent GDP growth has been overstated.
Slowing annual growth was seen for retail sales, durable goods orders and the purchasing managers' new orders index. The moving-average new claims for the unemployment index continued deteriorating, as real earnings plunged and consumer confidence softened. Also, the January trade deficit resumed monthly deterioration.
As an ongoing general guideline, market perceptions overestimate economic activity and underestimate the inflation problem. As a result, most economic reporting will continue to surprise consensus expectations on the downside, and inflation numbers will tend to surprise the markets on the upside.
With a formal recession warning looming with May's SGS, this month's scheduled "Reporting Focus" on the money supply has been pushed back one month to that May edition. Money supply and its relationship to the economy will be featured as at least one of the recession indicators, while another indicator or two may be ready to move into the warning mode at that time. Accordingly, this month's "Reporting Focus" has been redirected to an alternate measure of nonfarm payrolls, as published by the Bureau of Labor Statistics (BLS).
THE BIG THREE MARKET MOVERS
(Each of these series is explored in the background article "A Primer On Government Economic Reports," available on the home page.)
Employment/Unemployment -- March payroll weakness against inflated expectations was predictable. With only a moderate swing in the size of the worthless monthly bias factors, underlying reality -- economic weakness -- dominated the report. The improvement in the unemployment rate, once again, was no more than statistical noise generated by poor quality seasonal adjustments. Further, the questionable value of the payroll series as used by market hypesters is even more evident in an alternate payroll measure published by the Bureau of Labor Statistics and highlighted in this month's "Reporting Focus."
The popularly followed unemployment rate U-3 for March 2005 fell to 5.17% from 5.39% in February, seasonally adjusted, with a change nearly equal to the published +/- 0.2% margin of error of the household survey. The improvement reversed the prior month's unemployment rise, but poor-quality seasonal factors once again come into play. Unadjusted, U-3 declined from 5.8% in February to 5.4% in March. The broader U-6 unemployment measure moved in tandem, easing from 9.9% in February to 9.4% in March, unadjusted, and declining from 9.3% to 9.1%, seasonally adjusted. Including the long-term "discouraged workers" defined away during the Clinton administration, total unemployment is roughly 12.1%.
The household survey showed a seasonally-adjusted 357,000 surge in March employment, following February's plunge of 97,000 in the number of people who were gainfully employed.
In contrast, the March payroll survey showed a below-consensus, seasonally-adjusted gain of 110,000 jobs (83,000 net of revisions), with February's gain revising to 243,000 jobs from the 262,000 jobs initially reported. The current monthly change in payrolls was statistically indistinguishable from zero. Reported annual growth softened to 1.64% in March from 1.80% in February.
Next Release (May 6): With bias factors something of a neutral factor in the April report, economic reality is likely to be a primary driver of reported employment change, again. Sub-par economic growth should result in weaker-than-expected April payroll growth and some miserable looking data in the months beyond. Further, look for the unemployment rate to resume its climb, once more, reversing the March decline and heading sharply higher into the third quarter.
Gross Domestic Product (GDP) -- The "final" estimate and second revision of fourth-quarter 2004 annualized real GDP growth came in at 3.85% +/- 3.1%, virtually unchanged (no more than statistical noise) from the 3.81% "preliminary" estimate and still down from the third quarter's 4.00%.
Revised fourth-quarter year-to-year growth was lower for the third straight quarter at 3.91%, down from 3.99% in the third-quarter and down from the yclical peak of 5.04% in first-quarter 2004. Average annual growth for 2004 was reported at 4.44% versus 3.04% in 2003.
New in the latest reporting were the first and only estimates of growth in Gross National Product (GNP) and Gross Domestic Income (GDI). The broadest measure of the U.S. economy, GNP includes the GDP plus trade flows in factor income (dividends and interest payments). The GDP is the reporting measure favored by net-debtor nations such as Papua New Guinea and the United States, since it does not reflect the economic damage suffered from servicing excessive debt to foreign holders of same. Annualized real growth in fourth-quarter GNP was 3.47%, instead of the 3.85% for the GDP.
The GDI is, in theory, the same number as the GDP, reflecting the double-entry bookkeeping system used to calculate GDP/GDI, with one side reflecting consumption, the other side reflecting income. Any irreconcilable differences end up in the "statistical discrepancy," which showed an unusual narrowing to $24.0 billion in the fourth quarter, from $60.4 billion in the third. That narrowing spiked annualized real growth in third-quarter GDI to 5.19%, compared with 3.85% for the GDP.
The GDP implicit price deflator (the inflation rate used to deflate the GDP) rose from 1.4% in the third-quarter to a revised 2.3% (was 2.1%) in the fourth. Those rates compared with respective annualized quarterly inflation reported in the CPI of 1.9% in the third quarter and 3.4% in the fourth. The higher the rate of inflation used for the deflator, the weaker will be the resulting inflation-adjusted growth. A fourth-quarter deflator at the CPI inflation rate would have knocked the official 3.8% GDP growth down to 2.7%.
Despite the so-called "final" status of the current national income numbers, they remain subject to regular annual and benchmark revisions as far into the future as the Bureau of Economic Analysis will exist. Current growth rates likely will suffer downward revisions in the next few years, as harder underlying data (such as the retail sales revisions) become available. After that, the revisions likely will be to the upside, as the government comes up with new methodologies for squeezing non-existent economic growth out of already over-massaged and over-stimulated data.
As discussed in the background articles, the GDP is the most heavily politicized of the popularly followed series and has little meaning other than as political propaganda, or for the impact it may have on the financial markets. It rarely indicates actual economic activity, except for an occasional coincidence. GDP reporting is overstated by about 3%, which would place actual annualized real growth at roughly 0.8% plus or minus about 3%, given published 90% confidence intervals.
Next Release (April 28): The "advance" estimate of first-quarter 2005 GDP likely will disappoint inflated expectations. Hypes and hopes should be for some improvement in economic growth in first-quarter 2005, that is, above 3.8%. Keep in mind that even though currently reported GDP growth is above the historical average and would be considered solid in normal times, the markets still seem to sense that instead of strong business activity, background circumstances are more borderline recession.
Market fears are justified. If GDP reporting were accurate, current real growth would be below 1.0%, and the dichotomy between GDP reporting and market concerns would not exist. Instead, 3.8% growth is viewed as soft, and unrealistic expectations are built into the markets to adapt to the administration's fantasy numbers.
Consumer Price Index (CPI) -- The seasonally-adjusted February CPI-U rose by 0.4% (increased by 0.6% unadjusted), after gaining 0.1% in January. That resulted in unadjusted February year-to-year inflation holding at 3.0%.
Using the CPI's original (pre-Clinton Era) methodological approach of a fixed basket of goods (vs. substitution of hamburgers for steak as estimated by geometric weighting) would leave year-to-year inflation at about 5.7% instead of the official 3.0%.
The "experimental" Chained Consumer Price Index (C-CPI-U), the fully substitution based CPI that presumably is the eventual replacement for current CPI reporting, also held at January's year-to-year inflation rate, 2.6%.
Next Release (April 20): Inflation pressures will continue to offer upside surprises in many reports, and the March CPI report should be one of them, as recent underreporting continues to catch up.
Any seasonally-adjusted monthly change above or below roughly 0.4% in March should subtract from or add directly to the currently reported annual growth of 3.0%.
OTHER TROUBLED KEY SERIES
To varying degrees, the following series have significant reporting problems. Each series will be addressed in a monthly "Reporting Focus," with an alternate Payroll Employment measure covered this month. In addition to the big three, other series that have been detailed are The Federal Deficit (a background article that will be updated in the next several weeks), Consumer Confidence (November 2004 SGS), the Trade Balance (December 2004 SGS), Industrial Production (January 2005 SGS), Initial Claims for Unemployment Insurance (February 2005 SGS) and Retail Sales (March 2005 SGS).
Federal Deficit -- The official deficit for the fiscal year ended September 30, 2004 was $412.3 billion, up from $374.8 billion the year before. For the twelve months ended February 2005, the rolling deficit was $407.8 billion versus $406.8 billion in February 2004. Gross federal debt as of the end of September (U.S. fiscal year-end 2004) was $7.379 trillion, up $596 billion from a year earlier; at month-end March 2005, gross federal debt was $7.777 trillion, up $646 billion from March 2004, which, in turn, was up by $670 billion from March 2003.
Initial Claims for Unemployment Insurance -- The annual change for new claims on a smoothed basis, for the 17 weeks ended March 26th, was a decline of 7.5% versus an 8.9% decline in the 17 weeks ended February 26th. This deterioration over the last several weeks is on track for growth to turn positive (a negative economic development) by mid-year, possibly heralding the onset of a recession.
The volatility of the seasonally-adjusted weekly numbers is due partially to the seasonal-adjustment process. For example, a portion of the surge in new claims from 330,000 to 350,000 in the latest week was due to the Department of Labor's faulty efforts at seasonally adjusting the numbers for the Good Friday week. When the series is viewed in terms of the year-to-year change in the 17-week (three-month) moving average, however, such is a fair indicator of current economic activity.
Real Average Weekly Earnings -- February's seasonally-adjusted real average weekly earnings fell 0.4% from January, after a revised 0.2% January gain (had been a 0.2% decline). February's level was 0.8% below February of 2004. Allowing for the biases built into the CPI series used to deflate the weekly earnings, annual change in this series continues on the brink of generating a recession warning signal.
Retail Sales -- The annual benchmark revision knocked down the dollar level of U.S. retail sales by 3.8% from what was initially reported for February 2005, with slower growth being seen back two years. That means historical growth in personal consumption has been overstated, and there should be some meaningful downward revisions to historical GDP, at such time as that series goes through its next round of annual revisions.
As first reported, seasonally-adjusted February retail sales rose by 0.5% +/-0.7%, which was statistically indistinguishable from zero growth. The benchmark revision knocked down the monthly growth to 0.4% +/- 0.7%. On a year-to-year basis, February retail sales were up 7.7% from the year before, a pace that slowed, however, from January's 8.1% annual growth.
Where inflation-adjusted growth in retail sales below 1.8% (using the standard CPI for deflation) signals recession, annual growth still is tending to slow but holding well above that signal trigger level.
Next Release (April 13): The March report should come in on the weak side of expectations, reflecting a softer economy than commonly is recognized.
Industrial Production -- February's seasonally-adjusted industrial production was up 0.3% (0.6% net of revisions) after January's revised 0.1% gain (previously unchanged) against December. Year-to-year growth, however, continued to slow, now at 3.5% versus 4.2% in January.
Next Release (April 15): With weather patterns entering a more stable season, look for underlying economic activity to drive near-term production reports. Weaker-than-expected economic growth should generate downside surprises in production reporting.
New Orders for Durable Goods -- Seasonally-adjusted new orders for durable goods in February rose by 0.3% (0.2% net of revisions) after January's 1.1% drop (previously reported as a 0.9% decline). February year-to-year growth dropped sharply to 5.7% from 10.4% in January. The widely followed Nondefense Capital Goods Orders was unchanged in February after a 1.1% gain (previously 0.2%) in January.
Monthly volatility is high for this series, which was one of the better leading indicators of broad economic activity, when smoothed using a three-month moving average. After the semi-conductor industry stopped reporting new orders, and the series' quality fell apart.
Trade Balance -- The January trade deficit in goods and services rose to $58.3 billion, seasonally adjusted, the second biggest monthly deficit in history, after November's $59.4 billion, and up from December's $55.7 billion. All months back through January 2004 went through the annual "carryover" revisions. "Carryover" represents late reporting of exports or imports that end up getting stuck in the wrong month's reporting. Once a year, corrections are made and the revisions usually are minor, as they were for 2004.
Next Release (April 12): Look for a widening in the February trade deficit. Continued sharp deterioration remains highly likely over the next six-to-nine months, with most reports consistently coming in worse than market expectations.
Consumer Confidence -- March 2005 confidence measures softened for a second month, and year-to-year change patterns remained mixed. The Conference Board's Consumer Confidence dropped by 1.9% for the month, while the University of Michigan's Consumer Sentiment fell by 1.6% (the third month down for the sentiment measure). Smoothed with a three-month moving average, the year-to-year change in Confidence rose by 14.1% in March, up from 12.9% in February, while Sentiment plunged 4.0% in March after a 1.4% drop in February. As lagging, not leading, indicators, these numbers continue to confirm the economy was slowing throughout fourth-quarter 2004 and has stagnated so far into 2005.
Producer Price Index (PPI) -- The seasonally-adjusted February Finished Goods PPI rose by 0.4% (0.5% unadjusted) after a 0.3% increase in January. February's 4.7% year-to-year inflation rose to within striking distance of the 14-year high of 5.0% seen in November 2004.
Next Release (April 19): Despite a large component of random volatility in monthly price variations, PPI inflation reporting over the next three-to-six months still should average above consensus forecasts.
Purchasing Managers Survey (Non-Manufacturing) -- Published by the Institute for Supply Management (ISM), there is nothing unusually wrong with this survey of the service industry, except it does not have much meaning. Unlike its older counterpart, the manufacturing survey, if service companies such as law firms, hospitals or fast-food restaurants have "increased orders," that does not necessarily mean the economy is picking up.
That said, the overall index rose from 59.8 in February to 63.1 in March. The index is a diffusion index, where a reading above 50 indicates a growing service economy, in theory.
The Prices Paid component diffusion index, however, is a general indicator of inflationary pressures. The March index eased slightly to 65.6 from February's reading of 66.4, levels that still indicate strong inflation. On a three-month-moving-average basis, the March prices paid index was up 8.2% from March 2004 compared with a 14.2% gain February.
BETTER-QUALITY NUMBERS
The following numbers are generally good-quality leading indicators of economic activity and inflation that offer an alternative to the politically hyped numbers when the economy really is not so perfect. In some instances, using a three-month moving average improves the quality of the economic signal and is so noted in the text.
Economic Indicators
Purchasing Managers Survey (Manufacturing) - New Orders -- Following the money supply numbers, this looks like it will be the next of the key SGS early warning indicators to signal a recession, despite the slow downward shift in followed growth patterns.
The March index rose 2.3% from February from 55.8 to 57.1. The Commerce Department provides the seasonal factors for this series, and the adjusted monthly numbers often can be misleading in the reporting of month-to-month change. This problem is overcome by using year-to-year change on a three-month moving average basis. March's index was down 12.6% from March 2004, compared with February's annual decline of 16.4%, while the three-month moving average annual change continued notching lower, with annual declines of 4.1% in October, 9.2% in November, 10.6% in December, 13.6% in January, 14.5% in February and 15.9% in March.
Published by the Institute for Supply Management (ISM), the New Orders component of the Purchasing Managers Survey is a particularly valuable indicator of economic activity. The index is a diffusion index, where a reading above 50 indicates rising new orders. The overall March index eased to 55.2 from 55.3 in February, slowly closing in on the 50.0 that divides a growing versus contracting manufacturing sector. The current year-to-year downturn in the three-month moving average is close to generating a recession warning signal.
Help Wanted Advertising Index (HWA) -- The February index held at 41, and the recent upturn seen in January (rising to 41 from 38 in December) may have a rough seasonal element to it. In 2004, the index rose from 38 in January to 41 in February. Smoothing seasonal distortions is the reason this series is best viewed on a year-to-year basis with a three-month moving average.
For February, that year-to-year change in the three-month moving average was up 3.4% after 0.9% growth in January. HWA is a series that never recovered from the 2000/2001 recession, having been at its cyclical nadir of 36 as recently as November 2004. Accordingly, current movement still is bottom bouncing but worthy of close attention.
Published by the Conference Board, the HWA is a reliable leading indicator of employment activity. The series, at present, has backed away some from being borderline in signaling a pending recession.
Housing Starts -- Housing starts replaces the building permits series that was broken by the Census Bureau in January 2005, when the survey base was changed without provision for a consistent link between past and current reporting.
February housing starts rose by 0.6% in February, down from 6.2% monthly growth in January. On a three-month moving average basis, February year-to-year growth was 9.1%, following three successive months in negative territory. The series is borderline for generating a recession warning.
Money Supply -- Before inflation adjustment, the year-to-year rates of change in the three-month moving averages of February M1, M2 and M3 were 4.6%, 5.5% and 5.9%, respectively, and trending flat to lower. On the same basis, except adjusted for current CPI reporting, M1, M2 and M3 growth rates were up 1.5%, 2.4% and 2.8%, with little trend. The inflation-adjusted growth rates for M1 and M2 were underwater, however, using the old-style CPI. M3 was up just 0.1%. All three growth rates are at the point of generating a recession warning, and enough of the March weekly numbers are in place to indicate such a warning is a virtual certainty in the next several weeks.
The economy is not growing and has been showing regular signs of faltering. Weak real growth in the broader money measures M2 and M3 is a factor. Deflated by the old-style CPI, whenever M2 and M3 have turned negative year-to-year, using a three-month moving average, the economy always has followed shortly thereafter. Strong money growth, however, does not always lead to a strong economy. These concepts will be further explored in next month's "Reporting Focus."
Inflation Indicators
Purchasing Managers Survey (Manufacturing) - Prices Paid -- The March Prices Paid diffusion index rose for the first time in five months. Higher oil prices suggest that March will not be the last up month. The March index was up 11.5% from February, rising from 65.5 to 73.0, which is a highly inflationary reading. Nonetheless, on a three-month moving average basis, year-to-year change was down 14.6%, after a 7.4% decline in February.
Published by the Institute for Supply Management (ISM), the Prices Paid component of the Purchasing Managers Survey is a reliable leading indicator of inflation activity. The measure is a diffusion index, where a reading above 50 indicates rising inflation.
Oil Prices -- West Texas Intermediate Spot (St. Louis Fed) has continued to surge, up 13.2% in March after a 2.3% gain in February's monthly average price. Year-to-year, the average March spot price is up an extraordinarily inflationary 47.7%. The price of oil has rallied further, to record levels, in the days before this SGS was put to bed. Despite any near-term sell-offs or price volatility, high oil prices are likely to become a major feature of the unfolding 2005 inflationary recession.
Oil price changes permeate costs throughout the economy, ranging from transportation and energy costs, to material costs in the plastics, pharmaceutical, fertilizer, chemical industries, etc. Where effects of continued oil price volatility will affect CPI reporting, downside oil price movements tend to be picked up more quickly and fully than are upside movements. Even as currently understated, the, CPI inflation will be stronger than commonly predicted for the next six-to-nine months, partially as a result of these continued high oil prices.
U.S. Dollar -- March's monthly dollar average (the Federal Reserve's Major Currencies U.S. Dollar Index) fell 1.4% after February's 1.0% increase, while the year-to-year decline in the greenback accelerated to 6.7% in March following February's 3.6% drop.
Continued dollar weakness has been seen as Asian central banks huff and puff over investing more funds outside the U.S. dollar. Communist China may be on the brink of changing its currency system, perhaps with dual, domestic and foreign currency? If so, the dollar could see added, serious selling pressure very quickly.
New record lows for the dollar remain likely in the months ahead, despite any near-term bounce and official or unofficial supportive intervention by any central bank(s).
Generally, the weaker the dollar, the greater will be the ultimate inflation pressure and the eventual liquidity squeeze in the U.S. capital markets.
MEASURE OF NONFARM PAYROLLS
My friend John Crudele, financial columnist with the New York Post, recently reminded me of a further long-term problem the Bureau of Labor Statistics has with its reporting consistency, beyond the myriad issues already discussed in the SGS. Separate from the BLS's inability to reconcile to within 1,000,000 jobs the household survey of employed people with the payroll survey of jobs, the BLS cannot even reconcile the sub-components within the payroll survey to within 500,000 jobs.
With irregular timing, ranging from weeks to over a month after the regular employment report, the BLS publishes regional and state employment on a monthly basis. The state-by-state data are compiled from the same household and payroll surveys used in national reporting, so one might assume that a total of employment in the fifty states plus the District of Columbia would equal the U.S. total. Such is not the case.
The March 31st release showed that seasonally-adjusted February payrolls by state totaled 132.285 million. The April 1st release of March payroll data showed a revised national total for February of 132.816 million, which had been 132.843 million in original reporting. The difference of 531,000 to 558,000 jobs is meaningful, especially considering that both sets of reporting encompassed the recent major benchmark revision to the payroll or establishment survey.
Part of the reporting difference is due to different assumptions on the bogus bias factors (the net birth/death model of company formations) and difference in seasonal factors. Nonetheless it is hard to believe that the BLS, after decades of these inconsistencies, still cannot get the same national total when jobs are added up by state or estimated solely at the national level.
The BLS explains that, "State estimation procedures are designed to produce accurate data for each individual state." The BLS then goes on to caution against aggregating the state data and comparing them with the independently derived national employment series. The problem, in theory, is that "each state series is subject to larger sampling and nonsampling errors than the national series."
The funny thing, though, is that those big individual state errors seem to balance out when the state numbers are added to together. The aggregated numbers, instead of jumping all over the place, show a consistent bias to the downside against the "national" estimates. There seems to be some missing political component from the state totals that is needed to come up the national growth being reported by those great statistical manipulators in Washington, D.C.
Indeed, the state totals offer an alternate version of what is happening in the labor market. As a rule of thumb, the less a series is followed by the popular press, the less likely it is to suffer political manipulation. Accordingly, the national totals by state may actually offer a more accurate, less-politicized version of employment change than the glamorized and highly publicized and politicized "official" nonfarm payroll totals.
For example, per the most recent national report, seasonally-adjusted payrolls in February 2005 were up by 2,350,000 from February 2004. The same change calculated by summing all the states shows payrolls up by 1,919,700 for the year ended February 2005. The latter gain is 18.3% less than the official one.
In like manner, the revised and official monthly payrolls gains for December 2004, January 2005 and February 2005 are 155,000, 124,000 and 243,000, respectively, versus 102,900, 61,300 and 197,300 based on state totals. The three-month jobs gain based on state totals was 361,500, 30.7% less than the official 522,000 gain. The trend in discrepancies is getting worse, not better.
Beyond suggesting that the national data may be overstating economic growth, the state data also give a rough picture of varying regional economic activity. Rarely are all sections of the country experiencing the same business environment at the same time. The aggregated state payrolls in February 2005 were 1.5% ahead of February 2004 (versus 1.8% for the official national growth). States that have jobs growth more than one percent above (2.5%) or below (0.5%) the national state average probably are seeing respectively relatively good and bad times. Keep in mind, however, that these state numbers are far from perfect and the national state average is not showing a booming economy.
The only state on the boom side is Nevada, with annual jobs growth of 6.4%. States with generally stronger growth of 2.5% to 4.0% are Utah, Arizona, Colorado, Idaho, Oregon, Hawaii, Florida and Delaware. Michigan is in recession, with employment down 0.2% year-to-year. States with minimal 0.0% to 0.5% growth include Ohio, Illinois, South Carolina, Louisiana and the District of Columbia.
Originally scheduled for this issue, the money supply focus will be covered in May, along with detail of what should be the first recession alert of this business cycle.
The various money supply measures and components and their relationships to the economy, inflation and the financial markets will be explored. Related Fed policy movement also will be viewed from an historical perspective.
May's Shadow Government Statistics is scheduled for release on Wednesday, May 11, 2005. The posting of the May SGS on the website, as well as any interim alerts, will be advised immediately by e-mail.