March 2023 Money Supply activity reflected a continuing and intensifying 55-year record-high flight to liquidity in Basic M1 (Currency plus Demand Deposits), with Basic M1 notching higher to 35.0% of the aggregate headline Money Supply M2, its highest proportion since the same level in April 1970, a 53-year high. Apparently, neither has the Bureau of Labor Statistics, as detailed in an article by BLS economists John Greenlees and . Current U.S. Economy Remains Far from a Full Recovery While shifting focus to the troubled banking system, FOMC hopes and activities still are concentrated on some way of triggering a Recession, again, ostensibly to help contain inflation otherwise being driven by a non-existent overheating economy, where the mounting inflation pressures primarily are due otherwise, to continuing, extreme levels of Money Supply creation. Underlying headlines of better-quality U.S. economic numbers, reviewed here in Part II [see Points (1) to (18)], suggest that the United States has been in Recession since First-Quarter 2022, allowing for the political games played with the Strategic Petroleum Reserve depletion, which otherwise also accounted for the headline boost in Second-Half 2022 (Third- and Fourth-Quarter 2022) GDP growth. (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. 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. 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. 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. ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. 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 Separately, the inflation issue is complicated by independently rising gasoline prices, not by any overheating economy! [Again, the E-Mail Updates are available to you as part of both new and existing regular subscription; just request it by e-mail from johnwilliams@shadowstats.com .]. Deepening Deficits in Fourth-Quarter and Annual 2020 Real Net-Exports (GDP) and the Related Real Merchandise Trade Deficit Were the Worst Ever in Modern U.S. 1461. March 2023 Money Supply numbers and historic tables have been posted and graphed to the ALTERNATE DATA TAB (see the Menu Bar above), with more extensive analysis, graphs and coverage following in the DAILY UPDATE e-mails and in pending Commentary No. Separately, circumstances are exacerbated directly, at present, by spiking, weekly gasoline prices, as seen through the week of April 17th. Please note that the ShadowStats Alternate Unemployment Data and Graphs have been updated for March 2023 on the ALTERNATE DATA TAB (see the above links ribbon). 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. Ongoing rate hikes at each of the last several FOMC Meetings to reduce inflation, remain counterproductive in the context of an already deepening Economic Recession and resurgent gasoline prices. Holding Physical Precious Metals Remains the Best Hedge Against Coming Inflation and Market Turmoil, Deepening Economic Woes and Soaring Inflation Ahead The 2020 Pandemic-Driven Recession was timed by the defining National Bureau of Economic Research (NBER), from Peak-to-Trough, as from February 2020 to April 2020 [2 months, the shortest on record] and from Fourth-Quarter 2019 to Second-Quarter 2020 [2 quarters]. 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). Background definitions and related detailed discussion, historical data and graphs for each of the Money Supply Series were covered in Benchmark Commentary No. In Australia, unions are already demanding 3 per cent annual pay rises in wage negotiations, while Labor's shadow treasurer Jim Chalmers used Tuesday's data to highlight that inflation was. Full-Year 2020 Existing- and New-Home Sales Were Highest Since 2006 Shadowstats.comis a website that analyzes and offers alternatives to government economic statistics for the United States. That said, expanded Federal Government Deficit Spending continues, currently at the Debt Ceiling. Near Record Growth of Currency in Circulation Foreshadows Inflation Risk Those details are posted and graphed on the Alternate Data Tab. Best Wishes -- John Williams. The latest Economic and Inflation releases were covered earlier in the Opening Section of this DAILY UPDATE. Commentary No. (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%). EXPANDED SHADOWSTATS ALERT: - Intensifying Risks of a Highly Inflationary, Major U.S. Economic Downturn. 1454, No. -- 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. 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. By its very nature, the shadow economy is difficult to measure. Internationally, these activities are more broadly referred to as the shadow economy. Shy of a near-term happy resolution to the Russia-Ukraine War, the circumstance only has exacerbated the ShadowStats Hyperinflation pre-Russia-Ukraine War outlook of the last year or so, where: Despite recent relative weakness in gold prices and related Central Bank or other market machinations, the ShadowStats broad outlook in the weeks and months ahead has remained for: (1) A continuing and renewed deepening (potentially hyperinflationary) U.S. economic collapse, reflected in (2) Continued flight to safety in precious metals, with accelerating upside pressures on gold and silver prices, (3) Mounting renewed selling pressure on the U.S. dollar, against the Swiss Franc and other traditionally stronger currencies, and (4) Despite recent extreme Stock Market volatility and current near-record high levels in the popular U.S. stock-market indices, high risk of major instabilities and heavy stock-market selling continues, complicated by ongoing direct, supportive market interventions arranged by U.S. Treasury Secretary Yellen, as head of the President's Working Group on Financial Markets (a.k.a. SHADOWSTATS DAILY UPDATE - May 1st to May 3rd A major Subscriber-Only e-mail update is pending for later today. 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]. At the same time, the Pandemic-distorted and disrupted year-to-year gain for February 2023 Basic M1 eased to 4.8% from and unrevised 6.2% in February 2023. This Masked Accelerating Flight-to-Liquidity in Traditional M1 from Non-M1 Components of M2 Consumer Liquidity, Depression, Money Supply. 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). (4) April 25th (Federal Reserve Board, ShadowStats) -- Headline U.S. March 2023 Money Supply and Monetary Base details showed a continuing creation of, or a shift or flight to liquidity, all of which tends to fuel inflation. [Again, the E-Mail Updates are available to you as part of both new and existing regular subscription; just request it by e-mail from johnwilliams@shadowstats.com .] 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. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. 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. Manufacturing Sector Has Never Recovered Pre-Great Recession Peak Levels 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. Please click on a chart or link to view details. 1461. November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity On Top of an Upside Revision, Housing Starts Gained 4.9% in the Month; This Was Not Statistically Significant at the 90% Confidence Interval 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. In the end, the Fed has little choice but to support the banks and to let inflation run its course. 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. ET); Thursday, May 4th, the Census Bureau and Bureau of Economic Analysis release the March 2023 Trade Deficit (8:30 a.m. Trailblazer builds: Strengthen your main character up. There Is No V-Shaped Recovery Despite political hype to the contrary, such is helping to accelerate the pace of domestic Inflation. Shadowstats debunked. Shadow previously offered three subscription plans: Shadow Boost ($14.99 per month, or $11.99 per month with an annual subscription) with a basic gaming PC setup, Shadow Ultra ($29.99 per. Surging prices still reflect the extraordinary Money Supply stimulus following the Pandemic-driven collapse. INFORMAL ECONOMY SIZE AS A PERCENTAGE OF GDP. The Employment series is based on actual Payroll Taxes paid by Employers, as opposed to irregular (Pandemic-induced, telephone-only) impaired surveys of the Public as to Unemployment. Please contact johnwilliams@shadowstats.com for further details or any questions. 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 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. 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. [Posted May 1st, 1:00 a.m. For the Second Straight Month, Payrolls Declined Year-to-Year by 6.0% (-6.0%) Again, full detail follows in the DAILY UPDATE e-mails and in pending No. Please note: Our Data Download is currently only providing the 1980-Based numbers, but 1990-Based numbers will be introduced shortly. [See the earlier headline Payroll discussions and later FOMC comments.] Chances Are Reduced for Moderating Extreme Monetary and Fiscal Policies 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. Annual-Change Gyrations Are Just Beginning for Economic, Inflation, Money Supply and Financial Return Numbers, as the Pandemic-Driven Collapse Passes It First Anniversary (3) April 26th (Census Bureau). 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. Separately, though, the Fed also purportedly has been reducing its balance sheet assets, which should slow or cut the Money Supply growth and inflation. Unlike the Money Supply at present, even before the onset of Tapering and Balance Sheet Reduction, the Monetary Base was and is not close to record annual growth levels, previously seen during the 2007-2008 Banking System Collapse of the Great Recession, which at the time exploded Reserve Balances (up 5,000 percent year-to-year, but never reversed much in parallel in a post-Crisis movement). 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.]. Recessions are measured only from Peak-to-Trough, while Recoveries are measured from Trough-to-Regaining-the-Pre-Recession-Peak (timing not formally called by the NBER), which is far from being at hand, despite relative strength in some major numbers such as the GDP. (10) April 14th (Census Bureau, Bureau of Labor Statistics, St. Louis Fed, ShadowStats) [See the Opening Comments on the April 24th annual benchmark revisions to Retail Sales, which continue to show flat to negative annual contractions and quarterly contractions, net of inflation.]
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