For the month of February 2023, the real Deficit deepened to -l04.6 billion. 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. Background definitions and related detailed discussion, historical data and graphs for each of the Money Supply Series were covered in Benchmark Commentary No. If you are not a Subscriber, and wish to be, see the next paragraph. Economic Issues No. 30 -- Hiding in the Shadows : The Growth of the (5) April 25th (Census Bureau). Those details are posted and graphed on the Alternate Data Tab. Financial Market Turmoil Is Just Beginning, Key Monthly Economic Numbers Turned Negative Anew in Fourth-Quarter 2020 Those numbers are adjusted for inflation, using the Construction Producer Price Index. The latest Economic and Inflation releases were covered earlier in the Opening Section of this DAILY UPDATE. Single-family auths flat in Sep/Oct. Those details are posted and graphed on the Alternate Data Tab. (13) April 12th (Bureau of Labor Statistics). Trailblazer builds: Strengthen your main character up. Commentary No. Permits up strongly but it's all apts inSouth. 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 . Treasury Secretary Janet L. Yellen did not describe in her Opening Message for 2021, as she had in 2020, and as her recent predecessors had done, that the current Fiscal Path was Unsustainable. Yet that concept still appeared early in the Opening Summary: The debt-to-GDP ratio was about 100 percent at the end of FY 2021 [around 122% in November 2022 WJW]. -- Noted regularly here, New Home Sales (likely the least-reliable, least-meaningful, least-significant and most heavily revised headline series published by the Census Bureau) continued to sink year-to-year. Such Was the First Annual Gain in Freight Activity Since November 2018, When Excessive Fed Tightening Was Being Used to Constrain Consumer Liquidity and Domestic Economic Growth An informal economy (informal sector or shadow economy) is the part of any economy that is neither officially taxed nor monitored. Money Supply. (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%). Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded, not reduced. Reserves jumped by a dominant 7.1% in the month, which would speak to new money creation, while the Currency in Circulation component gained by 0.6% month-to-month, to a new historic high. As previously reviewed, the March Federal Open Market Committee (FOMC) raised its targeted Fed-Funds Rate by a minimal 0.25%, to 5.00%, citing hopes that the Banking-System Crisis would dampen the Economy and the FOMC-driven Inflation. 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 linear transformation of CPI tracks the $89 shadowstats series almost perfectly. 1461. -- 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. The revisions did not change quarterly patterns meaningfully, but did show that broader headline activity generally had been some somewhat slower than previously estimated in the last two years [graphs were plotted in the Subscriber-only e-mail of April 14th]. 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. 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. (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. Continuing Massive Expansions of Federal Government Deficit Spending and Federal Reserve Monetary Stimulus Promise Massive Inflation MARCH 2023 MONEY SUPPLY AND MONETARY BASE -- (April 25th, Federal Reserve Board [FRB], with ShadowStats Supplement). 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 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]. 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. 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. 1461. 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. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. Beyond Year One, Multi-Year, Crisis-Driven Collapses Need to Be Assessed Against Pre-Crisis Levels, or Stacked Two-Year Change, As Well As Year-to-Year Change I've yet to find someone who has been able to reproduce the claims made by Shadow Government Statistics about the extent to which government agencies are grossly misreporting the U.S. inflation rate. 1438, subsequent missives including particularly No. Payroll-Employment Benchmark Revisions Showed a Deepening, Accelerating Decline into an April 2020 Trough, With Renewed Deterioration at Present; Recovery from the Pandemic Shutdown Has Stalled and/or Is Regressing ShadowStats will re-address these numbers at that time. While the now-broadest aggregate Money Supply M2 declined year-to-year by 4.1% (-4.1%) in March 2023, the highly liquid and inflation driving Basic M1 was up by 4.8% year-to-year. ET; Friday, May 5th, the Bureau of Labor Statistics releases its estimates of April 2023 Unemployment and Employment (8:30 a.m. 1461] -- The 2020 Economic Collapse Remains Far from full Recovery. Walter J. The aggregate Monetary Base often moves broadly on a parallel basis with the Money Supply, but it also can vary widely with the Money Supply, tied to the dominance of its movements triggered by Bank Reserves held by Federal Reserve Banks. The Fed will release the headline April 2023 Money Supply and Monetary Base data at 1:00 p.m. November Unemployment and Payrolls Confirmed Stalled, L-Shaped, Non-Recovering Economic Activity Watch part 2 on hyperinflation: https://youtu.be/jzwU_UOwVMIUsing the same data collection and calculation methodologies as the Bureau of Labor Statistics us. Job gains have picked up in recent months and are running at a robust pace; the unemployment rate has remained low. What are Shadow's specs? 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. EXPANDED SHADOWSTATS ALERT: - Intensifying Risks of a Highly Inflationary, Major U.S. Economic Downturn. The projected continuous rise of the debt-to-GDP ratio indicates that current policy is unsustainable. Allowing for the 2021 Unfunded Liabilities, reflected here, that Debt-to-GDP ratio already was 552% at the end of Fiscal Year 2021. How Accurate is ShadowStats on The Understatement of US Inflation With Mind the Aftershocks: Post-Tantrum Market Calm Unnerves Traders . Use the drop-down menu below to find highlights and links to Commentaries from the present and past months. Please note with the ALTERNATE DATA Tab, that the Money Supply annual growth rates after February 2021 instead are against the February 2020 Pre-Pandemic Level not year-to-year (although both measures are plotted in the subscriber-only graphs). 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. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. Commentary No. (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. 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. Data source: Quarterly Informal Economy Survey (QIES) by World Economics, London. The Countries With The Largest Shadow Economies [Infographic] - Forbes 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. -- 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. An Increasing Number of Unemployed People Were Misclassified as Employed; Corrected December Unemployment Would Have Jumped, Instead of Holding at 6.7% 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. All previous Commentaries are available in, or accessible from, the upper left-hand column of this www.shadowstats.com Home Page. (8) April 18th, (Census Bureau). 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. THIS WEEKS PENDING DAILY UPDATE COVERAGE OF FOMC AND ECONOMIC ACTIVITY (Monday, May 1st to Friday, May 5th): (Monday) March 2023 Construction Spending will be covered Tuesday, (Late Wednesday and Thursday) May 2023 FOMC Meeting, (Thursday) March 2023 Real Merchandise Trade Deficit, (Friday) April 2023 Employment and Unemployment. [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, 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. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. 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. Fed Chair Powell Noted That Surging Money Supply No Longer Boosts the Economy Our estimates of the tax effect . That Is Because the Current Collapse Is Pandemic, Not Business-Cycle Driven; Surging Money Growth in a Non-Business-Cycle Collapse Can Trigger Hyperinflation 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. 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). (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%). Annual growth in Payrolls has been slowing since February 2022. While the January 2021 Cass Freight Index Gained Year-to-Year for the Fourth Straight Month, It Also Contracted by 1.6% (-1.6%) from Two Years Ago -- 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. 1461. Collapsed Oil Prices Still Suppressed November CPI and PPI Annual Inflation; Yet, Oil Prices Suddenly Are Surging Anew 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. Risk of Hyperinflationary Economic Collapse Has Accelerated With Democrats Taking Control of Both the White House and Congress Announced FOMC policies are little more than jawboning and targeted financial-market hype, until put into actual full effect. Where Commercial Aircraft account for about 32% of total orders, the remaining 68% includes everything else, ranging from automobiles to computers. Separately, the inflation issue is complicated by independently rising gasoline prices, not by any overheating economy! Deconstructing ShadowStats. Why is it so Loved by its Followers but Annual-Change Gyrations Are Just Beginning for Economic, Inflation, Money Supply and Financial Return Numbers, as the Pandemic-Driven Collapse Passes It First Anniversary 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 . TRA's research provides businesses with an understanding of the current operating market which is important in making future decisions. 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. ShadowStats' John Williams: Why inflation now is really 13. - YouTube HEADLINE ECONOMIC, INFLATION AND MONETARY COVERAGE OF THE LAST MONTH AND OTHER KEY NUMBERS: (1) April 28th (University of Michigan). Business-Cycle Conditions Are Collapsing Rapidly, Amidst an Extreme Acceleration in Inflation That said, more commonly, sharp annual declines in recent months have tended to be statistically significant, but not the month-to-month changes. Jacinta Price named shadow minister for Indigenous Australians . SHADOWSTATS DAILY UPDATE - May 1st to May 3rd A major Subscriber-Only e-mail update is pending for later today. Nov 26, 2013 Housing Starts delayed again. ShadowStats and the 'Alternate Inflation' Myth - US News 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. 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. I also have provided testimony before Congress (details here). -- 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. 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. 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. Severe, U.S. Dollar-Debasing Inflationary Pressures from Existing, Extreme Monetary and Fiscal Policies Are About to Get Much Worse Current employment/ economic conditions will be assessed and reviewed shortly in the pending No. Including Commercial Aircraft, aggregate New Orders recovered pre-Pandemic levels in Third-Quarter 2020. Underlying Fundamentals Remain Extremely Strong for Gold and Silver, and Weak for the U.S. Dollar and Stocks, Despite Central Bank or Other Systemic Machinations to the Contrary, January 2021 Manufacturing Declined Year-to-Year for the 19th Consecutive Month, Still in the Downturn Induced by the FOMC 15 Months Before the Pandemic Collapse 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. As previously reviewed, the March Federal Open Market Committee (FOMC) raised its targeted Fed-Funds Rate by a minimal 0.25%, to 5.00%, citing hopes that the Banking-System Crisis would dampen the Economy and the FOMC-driven Inflation. Suddenly, their model stopped working, and they asked me if I could fix it. -- 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. 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. Part I --BOTTOM LINE Systemically Dangerous and Perilous FOMC Activity is Likely in the Week Ahead. Real Annual Growth in New Orders for Durable Goods Turned Negative, Amidst Renewed Slowing in Commercial Aircraft Orders Despite Happy Headline Gains in January 2021 Real Retail Sales, Production and Construction, the Underlying Payroll Employment Numbers Tell the Opposite Story 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. Despite a small monthly narrowing in the headline March 2023 Unemployment Rate, details remained consistent with an unfolding recession. Shadow 200 RQ-7 Tactical Unmanned Aircraft System - Army Technology 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. A prospering shadow economy makes official statistics (on unemployment, official labor force, income, consumption) unreliable. 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)]. Primers & Reports. Honkai: Star Rail Trailblazer build guide | PC Gamer October Industrial Production Continued in L-Shaped Recovery, With Annual Change Flattening Out in Negative Territory 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. The Shadow TUAS can carry payloads up to 27kg (60lb) including sensors and electronic warfare systems. Services include customized forecasts and analyses of the general economy, presentations and consultations in-house for clients. Go to https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/march-2023 for full detail. 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 . Your Shadow subscription. Money Supply Charts - Shadowstats.com (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. 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 Understate inflation and you end up overstating the Real or inflation-adjusted level of growth in GDP. Including Long-Term Discouraged Workers, the broader, March 2023 ShadowStats Alternate Unemployment Rate of 24.6% held at a seven-month high. Part II --REGULAR ALERTS - Weekly Review: ECONOMY, MONEY SUPPLY AND INFLATION ALERTS: Broad Economy continues in downturn, amidst spiking Inflation. Here are the results. Current liquidity and political risks and issues are intensified by potential Hyperinflation, long viewed by ShadowStats as the ultimate fate of the U.S. Dollar. 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. Where monthly jobs growth in the key Manufacturing, Retail Sales and Construction Sectors has turned flat-to-minus, the Leisure and Hospitality Sector showed continued strong, albeit slowing monthly growth, still holding shy by more than 2% (-2%) of ever recovering its pre-Pandemic level of activity.

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