In the currency market, the dollar abruptly reversed field and rose against the euro. Late Wednesday, the euro was trading at $1.4138 vs. $1.4323 on Tuesday.

According to Marketwatch.com, “the dollar got a boost after a Reuters report said central banks still sought the safety of dollar investments. Citing unnamed sources, the report said central banks in China, Japan, India and South Korea would likely shrug off portfolio losses stemming from any potential cut in the U.S. sovereign credit rating, opting to continue buying dollars because there are no alternatives in terms of the liquidity afforded by the currency.”

Among the day’s numbers, the most closely analyzed was the ADP’s employment index, which indicated that the private sector eliminated 520,000 net jobs in May. Although “still terrible, undoubtedly, but a bit less terrible,” as Ian Shepherdson, of High Frequency Economics wrote, it was the lowest job loss total since November.

“Despite

...

A detailed report from the National Association of Business Economics (NABE) says the U.S. economy will recover in the third quarter after a continued contraction in the second.

NABE said the near-term setback will be a result of a “sharp retrenchment” in business investment, but the billions in government efforts to invigorate the economy will soon offset that.

“While the overall tone remains soft, there are emerging signs that the economy is stabilizing,” said NABE president, Chris Varvares, who is also president of Macroeconomic Advisers. “The survey found that business economists look for the recession to end soon, but that the economic recovery is likely to be considerably more moderate than those typically experienced following steep declines.”

NABE also downgraded its growth forecast for the next few quarters - with the second quarter contracting 1.8%, followed by a meager 1.2% growth in the second half. The end result

...

Here’s a compilation of e-forecasting’s January GDP estimate, Macroeconomic Adviser’s December GDP estimate and forecast for 2009Q1. E-forecasting’s estimate is that January real GDP was declining at an 11.8% at annual rates.

Figure 1: GDP (light blue bars), GDP from e-forecasting, 2/20 (blue), and from Macroeconomic Advisers 2/13 (red); Macroeconomic Advisers’ forecast for 2009Q1 (red line with *), in Ch.2000$ SAAR. NBER defined recession dates shaded gray (assuming recession has not ended by 2009M03). Source: BEA, GDP release of 30 January, e-forecasting 2/20 and Macroeconomic Advisers [xls] 2/13 release.

Clearly, in order to hit the mean WSJ forecast of -4.6% SAAR growth (see discussion here), the rate of m/m decline must decelerate. As Macroeconomic Advisers notes:

…Our latest tracking forecast of a 4.6% annualized decline of GDP in the first quarter requires only 0.2% declines per month during the first quarter. …

The Macroeconomic Advisers forecast available

…

by Menzie Chinn New aggregate indicators on the macroeconomy are out. How do they compare against a summary measure of the macro series the NBER BCDC focus on? A week ago, Macroeconomic Advisers released their estimate of April GDP, while e-Forecasting released their estimate of May GDP. These two series are depicted in Figure 1. Recall that the NBER BCDC examines four other variables to gauge economic activity: payroll employment, industrial production, real manufacturing and trade sales, and real personal income less transfers [1]. To see how GDP has moved differently from these other measures of economic activity, see this post. Rather than providing a welter of series, I’ve tried to summarize the movement in these four variables by generating an index that is the first principal component of the four underlying series (all logged). This is the blue line in Figure 1. Figure 1: First ...

Article Source Since December 2007 is a commonly identified turning point [1], [2], I thought it would be of interest (given Jim's take on whether it matters if we're in a recession) to see what the indicators that the NBER BCDC focus on -- payroll employment, industrial production, real personal income less transfers, real manufacturing and trade sales, and to a lesser extent monthly real GDP -- are doing. They're declining... Figure 1: Log payroll employment (blue) and log industrial production (red), both normalized to 0 in 2007M12. Green shaded area is conjectured recession dates. Source: Federal Reserve Board via St. Louis Fed FRED II, accessed 8 June 2008. Figure 1: Log personal income less transfers in Ch.2000$ (blue) and log manufacturing and trade sales in Ch.2000$ (red), both normalized to 0 in 2007M12. Real personal income calculated by subtracting ...