US GDP grew +3.3% in Q4-2023 (Wall Street expected +2.0% and the Atlanta Nowcast model +2.4%).
3.3% consists of (contribution to the change, main series): PCE +1.91 pp; GDPI +0.38pp; Net Export +0.43 pp; Government +0.56 pp.
PCE = Personal Consumption Expenditures.
GDPI = Gross Domestic Private Investments.
Quarterly change (annual rate) of main series: PCE +2.84%; GDPI +4.60%; Exports +6.28%; Imports +1.86%; Government +3.27%.
Annual change of main series: GDP +3.11%; PCE +2.63%; GDPI +4.60%; Exports +2.07%; Imports -0.17%; Government +4.30%.
But the most interesting part is to look at the most cyclical, or "leading" data series. These include Private Residential Investments and PCE Durable Goods. The share of this spending in total GDP has practically declined before each recession.
In today's cycle, the share of Private Residential Investments in GDP (nominal dollars) decreased from Q2-2021 (8.84%) to Q4-2023 (7.91%), Figure 1.
In today's cycle, the share of PCE Durable Goods in GDP (nominal dollars) decreased from Q1-2022 (4.87%) to Q2-2023 (3.89%). The last two quarters here we have a rebound to 3.94% in Q4 2023. See Figure 2.
If we add up these two series, we will get a pretty good leading indicator... see Figure 3. On this chart I have also marked the last 3 soft landing cases from 1997, 1995 and 1986... According to history, we are headed for recession in the current cycle. Although in 1967 we had a false signal when the share in GDP dropped by 2.1 percentage points - and there was no recession. The current decline is 1.75 percentage points.
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