As of Q2 2024 Business Cycle indicators picture remains mostly unchanged
The indicators present a mixed yet stable outlook, imo does not suggest that the economy is not currently in a recession. However, it warrants caution for me as the growth rate is slowing, with the notable exception of spending indicators, which remain strong for now.
Pockets of concern for me comes from:
- The underperformance of real income compared to real spending could not be able to support high levels of spending much longer
- Employment has been flat for essentially 1 year already, and the other related labor market weakness in recent months.
Developments:
Most indicators reported increased activity growth in Q2 2024, except for income and employment.
- Payroll added 503 thousand jobs in Q2 2024 (802 in Q1 2024), a 0.3% Q/Q and 1.7% Y/Y.
- Employment decreased by -263 K persons in Q2 2024 (+283 in Q1 2024), a -0.16% Q/Q and 0.1% Y/Y. Basically flat in the last year.
- Real Income excluding transfers increased by 36.5 Billion in Q2 2024 (60.2 B in Q1 2024), 0.22% Q/Q and 1.7% Y/Y
- Real Spending increased by 112.1 Billion in Q2 2024 (56.4 B in Q1 2024), a 0.7% Q/Q and 2.7% Y/Y
- Industrial Production Index increased on average 0.9% Q/Q (-0.44% Q/Q in Q1) and 0.2% Y/Y. Despite the recovery is still flat since mid-2022.
- Real Manufacturing sales increased 22 Billion in Q2 2024 (-22 B in Q1 2024), a 0.5% Q/Q and 2% Y/Y.
