What will the US economy look like throughout 2023?

1.1kṀ4624

resolved Jan 20

ALL

100%22%

Continued overheating

75%

Soft landing

1.0%

Hard landing

1.7%

Stagflation (or incomplete hard landing)

Which quadrant in the tweet below will we end up in? Assume that core inflation is measured by the CPI. Assume that "unemployment" refers to the U-3 unemployment rate published by the BLS.

Fine print:

Note that the inflation condition is based on an annualized rate. The annualized core inflation in 2023-H2 is defined as follows for the purposes of this question: ((Core CPI in Dec 2023)/(Core CPI in June 2023))^2 - 1.

This question will resolve as soon as we first get the relevant unemployment and inflation data for December 2023. If for any reason any relevant data for a prior month is revised before then, I will use the revised version. I will not use any revisions made after that.

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⚠Unreceptive to pings ; AFK Creator

📢Resolved to "Continued overheating" ; See Comments for proof.

Heya I think both bls unemployment and cpi data are now out! Should be able to resolve this

@IsarBhattacharjee Do you have those numbers? links? Thanks! Creator looks inactive so may need mod resolved.

@SirCryptomind highest unemployment rate was 3.8% https://data.bls.gov/pdq/SurveyOutputServlet

3.2% core inflation (annualised) in H2 https://ycharts.com/indicators/us_core_consumer_price_index_mom

Resolution should be continued overheating

Do you know how best to tag a mod?

@IsarBhattacharjee I am a mod ;-)

@IsarBhattacharjee Where are you getting the annualized h2 core inflation from ycharts?

@DanMan314 If there is an error, just @ me

@SirCryptomind I’m not sure yet, just poking around.

@DanMan314 took the 6 mom growth rates then annualised (by squaring)

@IsarBhattacharjee I don’t think that’s quite valid. I believe it still comes out above 3%, but shouldn’t you be able to compute it by taking the % change in the BLS numbers June-Dec and doubling (to annualize)?

https://fred.stlouisfed.org/series/CPILFESL

June: 308.309

Dec: 313.216

That’s a 1.591% change, doubling gives a 3.182% annualized H2 growth?

Unless I’m making some embarrassing mistakes here.

@DanMan314 you can't just double it because the percentages compound

(1+ percentage/100) ^2 -1 will give the annualised rate

@IsarBhattacharjee Makes sense

@DanMan314 you're right that it won't make a different either way tho :)

@Natalia Can you please resolve with proof? Thank you.

I'm not sure why Justin Wolfers said that. It's very uncertain. https://fred.stlouisfed.org/series/CPILFESL
Core CPI in June was 308.309

In November was 312.251 meaning 0 additional inflation would give us 2.57%
But if December comes in at 0.2% m/m it becomes (312.251*1.002/308.309)^2 = 2.98% inflation

December at 0.3% core inflation m/m becomes (312.251*1.003/308.309)^2 = 3.19% annualized for H2.

Currently Cleveland Fed's inflation nowcast is 0.33% for December so if correct, more than 50% it should be continued overheating