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ShadowStats Newsletter John Williams Shadow Government Statistics is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype. Special Commentary No. 1441 June 24th, 2020 U.S. Economic Activity Was Faltering Before the Pandemic-Driven Collapse Pre-Pandemic Economic Troubles Were Driven Primarily by Intensifying Federal Reserve Policy Malfeasance March 2020 Economic Numbers Took the Initial Hit of the Pandemic Shutdown, Pulling First-Quarter 2020 GDP into an Annualized 5.0% (-5.0%) Contraction April 2020 Saw the Worst-Ever Monthly Collapses in Industrial Production, Nonresidential Construction, Payrolls and Retail Sales May 2020 Saw Dead-Cat Bounces in Monthly Production and Construction, Some Bottom-Bouncing in Payrolls and Rebounding Retail Sales; the Latter Two Series of Questionable Reporting Quality In Its 18th Straight Month of Annual Decline, the May 2020 Cass Freight Index® Notched Lower, Closing in on Its Record Trough of the Great Recession Second Year of Federal Reserve Reporting Delays Look to Exclude Long Overdue, Pre-Pandemic Downside Revisions to Industrial Production from the July 30th Second-Quarter 2020 GDP Estimate and Annual Benchmark Revisions All Considered, Initial Second-Quarter 2020 Real GDP Holds on Track for the Deepest-Ever Annualized Quarterly Contraction, Down by Roughly 50% (-50%) Protracted Recovery Likely Will Be L-Shaped, Not V-Shaped More ... Flash Commentary No. 1440 June 13th, 2020 June FOMC Outlook: Deepening Near-Term Economic Collapse, Protracted Recovery Unlimited Money Creation and 0.00% to 0.25% Fed Funds Promised for Foreseeable Future May 2020 Money Supply M1, M2 and M3 Annual Growth Rates Accelerated to Record Highs Additional Explosive U.S. Government Deficit Spending and Debt Expansion Likely Follow Early Inflation-Danger Signal: Monthly May Producer Price Inflation for Goods Spiked at a Record Pace, Reflecting Shortage-Induced 44% Surge in Meat Prices Fed Chairman Powell Confirmed Second-Quarter 2020 Real Gross Domestic Product Likely Will Show Its Deepest Quarterly Contraction in History ShadowStats Forecast for Second-Quarter 2020 Real GDP Contraction Remains Order of Magnitude 50% (-50%) Annualized Quarter/Quarter, 16% (-16%) Year/Year Third- and Fourth-Quarter GDP Could See Some Bottom Bouncing, Depending on the Magnitude and Success of Reopening Efforts Federal Reserve Board Members Forecast Fourth-Quarter 2020 Real GDP Annual Decline of 6.5% (-6.5%), Worst in Modern Quarterly Reporting, Other Than for Likely Deeper, Intervening Second- and Third-Quarter Annual Contractions More ... Flash Commentary No. 1439 June 9th, 2020 May 2020 Payroll Gain and Unemployment Drop Were Not Credible Extreme Pandemic-Shutdown Disruptions to Labor Market Conditions, and Surveying of Same, Heavily Distorted Bureau of Labor Statistics Reporting Headline Employment and Economic Bottom Bouncing Likely Are Still a Month or Two Away Second-Quarter 2020 Real Gross Domestic Product Remains on Track for Its Deepest Ever Annualized Contraction, Order of Magnitude 50% (-50%) Third- and Fourth-Quarter GDP Could See Some Bottom Bouncing, Depending on the Magnitude and Success of Reopening Efforts Recession Began Fourth-Quarter 2019, per the National Bureau of Economic Research, Recovery - Regaining the Pre-Recession Peak - Could Take Years, per ShadowStats FOMC June 10 Press Conference: Fed Funds Likely Will Hold at 0.00% to 0.25%; Economic Forecasts Probably Will Not Be Overly Optimistic More ... Special Commentary No. 1438 June 3rd, 2020 Entire Economic Expansion Since the Great Recession Is at Risk of Collapse Driven by the Pandemic, U.S. Economic Plunge and Financial Market Turmoil Are Accompanied by Rapidly Mounting Risk of a Hyperinflationary Systemic Implosion The Fed Is Creating Unlimited Money, Liquidity and Bailouts, With the Federal Government Embarking on Unlimited Deficit Spending and Bailouts Annual Growth in Money Supply M1, M2 and the ShadowStats M3-Continuation Jumped to Historic Highs in April 2020, With Accelerating Expansion in Early-May Ratio of Collapsing GDP to Exploding Federal Deficit and Debt Shows Historic Low Ability of the U.S. Economy to Cover U.S. Government Obligations GDP Inventory Changes Suggest Developing Shortages; Infinite Money Creation Chasing Too Few Goods Can Trigger Early, Rapid and Meaningful Inflation, As Seen Already With Meat and Other Foods Headline CPI-U Inflation in the United States from 1970, the Last Year of the Gold-Backed U.S. Dollar, to Date Has Been 561% Corrected for U.S. Government Understatement of the CPI-U ShadowStats Alternate CPI Inflation (1970 to Date) Has Been 4,257% Increase in the U.S. Dollar Price of Gold (1970 to Date) Has Been 4,314% Gold and Silver Prices Remain the Canary in the Coal Mine of Hyperinflation More ... Special Commentary No. 1437 May 17th, 2020 Worst U.S. Economic Activity Ever Reported April Retail Sales Fell the Most in Its 73-Year Reporting History Production and Manufacturing Tumbled the Most in Their 101-Year History Increasing New Claims for Unemployment Insurance and Insured Unemployed Confirm the Economy Fell Further in May, Albeit Likely at a Moderating Pace Second-Quarter 2020 Real Annualized GDP Contraction of About 50% (-50%) Will Surpass Anything Ever Seen If There Are Meaningful Efforts to Reopen the Economy, Third Quarter Activity Could Move Off Bottom in a Nascent L- or Shallow U-Shaped Recovery Benchmark Revisions to New Orders for Durable Goods Confirmed Major Downside Revisions Loom for Pre-Pandemic GDP Reporting U.S. Economy Already Was in Trouble Before the Pandemic, Because of Intensifying Federal Reserve Policy Malfeasance and Federal Government Fiscal Malpractice More ... Flash Commentary No. 1436 May 13th, 2020 April 2020 Cass Freight Index® Collapsed by 22.7% (-22.7%) Year-to-Year Level of Activity and Annual Decline Both Sank to Lows Last Seen at the Depths of the Great Recession Deepening Declines in Annual Freight Activity Remain Inconsistent With a Pre-Pandemic Booming Economy Consistent With Fourth-Quarter 2019 and First-Quarter 2020 Contractions in Industrial Production and Real Retail Sales the Pandemic Savaged What Already Was an Unfolding Recession More ... Flash Commentary No. 1435 May 10th, 2020 Headline April 2020 Unemployment Really Was Around 20%, Not 15% Bureau of Labor Statistics Disclosed Erroneous Unemployment Surveying for a Second Month About 7.5 Million People in the April Household Survey Were Misclassified as Employed Instead of Unemployed, per the BLS Headline April U.3 Unemployment at 14.7%, Should Have Been 19.5% The BLS Had Disclosed the Same Surveying Error Last Month; Where Headline March 2020 U.3 Was 4.4%, It Should Have Been 5.3% Per the BLS, Headline Data Will Not Be Corrected: "To maintain data integrity, no ad hoc actions are taken to reclassify survey responses." Nonetheless, Headline April Unemployment Soared to Historic Highs from March: U.3 from 4.4% to 14.7%, U.6 from 8.7% to 22.8% and ShadowStats from 22.9% to 35.4% More Realistic, Those Same Unemployment Numbers, Corrected: U.3 from 5.3 % to 19.5%, U.6 from 9.6% to 27.7% and ShadowStats from 23.7% to 39.6% April 2020 Payrolls Collapsed by an Unprecedented 20.5 Million Jobs Annual Growth in April 2020 Money Supply Measures Soared to Historic Highs U.S. Economic Activity Has Collapsed to Great Depression Levels, with the Federal Reserve Creating Unlimited Money More ... Flash Commentary No. 1434 May 3rd, 2020 U.S. Economy Already Was in Trouble Before the Pandemic, Because of Intensifying Federal Reserve Policy Malfeasance and Federal Government Fiscal Malpractice The COVID-19 Pandemic Shutdown Has Overwritten that Developing Recession With an Economic Collapse and Surging Headline Unemployment That Will Rival the Great Depression in the Week Ahead and Anything Seen in Modern U.S. Economic History in the Months Ahead Initial First-Quarter 2020 GDP Quarterly Contraction of 4.78% (-4.78%) Was the Worst Since the Depths of the Great Recession; It Likely Will Deepen to About 7% (-7%) in Its Monthly Revisions Second-Quarter 2020 GDP Remains on Track to Rival or Surpass the Deepest Contraction in the Great Depression Latest New Claims for Unemployment Insurance Indicate: April 2020 U.3 Unemployment Around 21% - Worst Since Great Depression Depths May 2020 U.3 Likely to Top 30% - Worst in Modern Economic History Federal Reserve Will Hold Its Current Expansive Policies in Place, Including Fed Funds at 0.00% to 0.25% and Unlimited Creation of Money and Liquidity, For the Duration of the Pandemic Downturn Money Supply Annual Growth Pushes to Record Highs With Each New Weekly Report More ... Flash Commentary No. 1433 April 28th, 2020 Retail Sales Benchmarking Showed the GDP Slowing More Than Headlined, Coming Into the Pandemic Shutdown ShadowStats Forecasts First-Quarter 2020 Annualized Real GDP Activity Ultimately Will Show a Drop of About 7.1% (-7.1%), With Second-Quarter GDP Plunging by Roughly 38% (-38%) Optimistic Expectations for an Initial First-Quarter Decline of 3.5% (-3.5%) Incorporate Overly Positive Reporting Assumptions That Filled Gaps in Initial, Limited-Quality Reporting of Activity in Underlying Series Assuming Some Pandemic Relief, GDP Could Be Off Bottom Before Year-End; Full Recovery Will Be Difficult and Complicated Mounting Risks of a Hyperinflationary Great Depression, as the Federal Reserve and Federal Government Launch Unlimited Money Creation, Deficit Spending and Financial Bailouts Annual Growth in Money Supply M1, M2 and the ShadowStats M3 Jumped to Historic Highs in First Two Weeks of April 2020 Watch for Early Inflation Warning Signal in Surging Price of Gold More ... Flash Commentary No. 1432 April 17th, 2020 First Major Coronavirus Impact on Headline Economic Reporting Devastated March Activity - Only the Final Third of First-Quarter 2020 GDP Despite Muted Pandemic Impact, Pending First-Quarter 2020 GDP Contraction Should Rival the Depths of the Great Recession Fully Hit Second-Quarter GDP Contraction Should Rival the Depths of the Great Depression, or Worse Since the March 2020 Unemployment Survey, 22 Million New Claims for Unemployment Insurance Have Been Filed, Suggestive of Headline April 2020 Unemployment Topping 22%; It Will Get Worse April 2020 Unemployment Rate Will More Than Double Anything Seen Post-World War II, Worst Since the Great Depression March 2020 Real Retail Sales Plunged by a Record Monthly 10.3% (-10.3%) March 2020 Industrial Production and Manufacturing Showed Their Deepest Monthly Plunges Since the Post-World War II Production Shutdown What Had Been a Recent Boom in Housing Starts and Building Permits Was Flattened in First-Quarter 2020 by Weakened March Activity, Second-Quarter 2020 Plunge Already Is in Play First- and Second-Quarter 2020 Quarterly Contractions in Real Retail Sales and Manufacturing Follow Pre-Pandemic Fourth-Quarter 2019 Contractions More ... DAILY UPDATE (July 6th to 7th) – Pending Commentary: Late July 7th - Flash Commentary, Issue No. 1442 / Pending Data: July 10th – June Producer Price Index (PPI) HEADLINES: Annual growth in early-June 2020 Money Supply (M1, M2 and M3) continued surging to new highs; June Financial-Weighted U.S. Dollar turned negative year-to-year (all graphed and detailed on the ALTERNATE DATA tab, linked above) / In the latest (July 2) government reporting, June 2020 Payrolls and Unemployment improved more than expected / Yet, severe surveying and reporting quality issues continue to mar the data credibility / The May 2020 Trade Deficit deepened sharply, in the context of collapsing global trade volume / Trade details have meaningfully negative implications for second-quarter 2020 GDP In earlier reporting, May New Residential Construction, Industrial Production and Freight activity showed dead-cat bounces / Benchmarked May Construction Spending showed a deepening downturn, despite gimmicked upside revisions / Rebound in May Retail Sales was neither credible nor meaningful / Incorporating all current headline economic reporting, second-quarter 2020 Real GDP still remains on track for the worst-ever quarterly contraction, rough order of magnitude of 50% (-50%) annualized plunge / First-quarter 2020 Real GDP contraction of 4.99% (-4.99%) was worst since the Great Recession / Current recession is being clocked from fourth-quarter 2019 / Dependent on some successful “reopening” of the economy, third- or fourth-quarter 2020 GDP could be moving off bottomLooming shortages amidst soaring sales and sinking production? / Unstable and questionable May 2020 Real Retail Sales soared on top of a large upside revision to April, recovering March 2020 activity; still down by 6.3% (-6.3%) year-to-year / May Industrial Production was unchanged versus April, net of revisions; down year-to-year by 15.3% (-15.3%) / On top of downside revisions, May real New Durable Goods Orders, ex-commercial aircraft, showed a modest monthly bounce of 8.3%, down 18.7% (-18.7%) year-to-year / May Cass Freight Index® year-to-year contraction deepened to 23.6% (-23.6%), approaching its Great Recession record trough As Gold and Silver prices begin to firm, nascent inflation pressures begin to surface / Shortage-driven 40.4% monthly explosion in meat prices drove a record 1.6% monthly surge in May 2020 Producer Prices for Goods / In context of the ongoing near-term economic collapse, June 10th FOMC held Fed Funds targeted at 0.00% to 0.25%, with the most-aggressive ever liquidity and money creation policies continuing (see SYSTEMIC RISK) / May CPI dropped 0.05% (-0.05%) in the month, still dominated by collapsing gasoline prices, while shortages spiked food prices L A T E S T .. N U M B E R S .. Quality and Credibility Issues Continued to Plague “Improving” Headline Labor Data (July 2nd, Bureau of Labor Statistics - BLS). Detailed in Flash Commentary No. 1439, revamped methodologies and seasonal adjustments, and major Pandemic disruptions to conducting the monthly BLS Payroll Employment and Household surveys raise meaningful questions as to the credibility of current, headline BLS reporting. Consider that the level of response to the June Household Survey (unemployment) was down to 65% from a normal 83%. Headline U.3 unemployment dropped to 11.10% in June from 13.26% in May, yet the BLS still counted 1.9 million unemployed as “employed,” which was an improvement from the 4.9 million headline misclassified people in May. The difference is that the 11.1% in June really was 12.3%, down from 13.3% in May, which really was 16.4%. Headline June payrolls also improved, gaining an even 4.800 million jobs, versus an upwardly revised May gain of 2.699 [previously 2.509] million, and a revised April crash of 20.787 (-20.787) million, [previously 20.687 (-20.687)]. Full details and graphs are found in No. 1442. Using the headline unemployment rates, which the BLS acknowledges are understated, Household Survey U.3 unemployment narrowed to 11.10% in June from 13.25% in May, U.6 was 18.03%, down from 21.19%, with the headline ShadowStats Alternate Measure, on top of U.6, at 31.2%, down from 34.0%, as graphed and detailed on the ALTERNATE DATA tab, linked above. (July 2) The May 2020 Merchandise Trade Deficit Widened Sharply for the Third Month, Amidst Collapsing Global Trade Activity (Census Bureau, BEA). Consider that nominal May U.S. exports plunged year-to-year by 32.1% (-32.1%), while imports plunged by 24.6% (-24.6%). Those annual declines suggest not only the extraordinary magnitude of the global economic downturn, the sharp deterioration trending in the second-quarter U.S. trade deficit also should take a sharp bite out of second-quarter U.S. GDP. Detail and graphs follow in No. 1442.(July 1) Benchmark Revised Construction Spending Showed Stronger Activity in 2018 and 2019, But a Deepening Slowdown/ Contraction into May 2020 (Census). Construction spending levels revised higher in recent years due to revamped “imputed” valuation methods for multi-unit residential construction. Aside from recalculated seasonals, corrective benchmarking was limited to 2018 and after. Revisions to nominal annual activity showed a net relative upside revision of 0.9% to 2018 growth, of 2.4% to 2019, but a downside revision of 0.8% (-0.8%) through April 2020. Net of inflation, Second-Quarter 2020 activity is on track for an annualized real quarterly contraction of 19.9% (-19.9%), following a downwardly revised First-Quarter gain of 6.3% [previously 10.2%]. Detail and graphs follow in No. 1442.(June 25) Still the Worst Showing Since the Great Recession, First-Quarter 2020 Real GDP Annualized Decline Revised Minimally to 4.99% (-4.99%) [Previously 5.05% (-5.05%), Initially 4.78% (-4.78%)], Against a 2.13% Gain in Fourth-Quarter 2019 (Bureau of Economic Analysis - BEA). Gross Domestic Income (GDI), the theoretical income-side equivalent to the product-side GDP, declined by a revised 4.39% (-4.39%) [previously 4.23% (-4.23%)], versus 3.11% in 4q2019. Gross National Product (GNP), the GDP plus the trade balance in Factor Income (Interest and Dividend Payments), declined by a revised 5.62% (-5.62%) [previously 6.07% (-6.07%)], having gained 2.71% in 4q2019. Discussed in No. 1441 and pending No. 1442, second-quarter 2020 Real GDP remains on track for an unprecedented, annualized quarterly plunge of about 50% (-50%).(June 25) May 2020 Real New Orders for Durable Goods, Ex-Commercial Aircraft, Bounced on Top of Continuing Downside Revisions (Census). Against downside revisions to April activity, Real New Orders for Durable Goods gained 15.5% in May and declined 19.2% (-19.2%) year-to-year. Net of resumed growth in May Commercial Aircraft orders, New Orders ex-Aircraft gained 8.3% in the month, down by 18.7% (-18.7%) for the year. Total New Orders for Durable Goods is on track for an annualized real Second-Quarter 2020 contraction of 62.0% (-62.0%), down year-to-year by 25.0% (-25.0%), see pending No. 1442.(June 23, 22) Nonsensically Volatile May 2020 New-Home Sales Reporting (Census. June 23) Gained in the Month, While the More Stable Existing-Home Sales Reporting (NAR, June 22) Showed a Decline. May New-Home Sales (Census) gained 16.6% in the month, on top of a 6.9% (-6.9%) downside revision to the level of April activity, with an annual gain of 12.7%. As usual, neither gain was statistically meaningful at the 95% confidence interval. Second-quarter 2020 New Sales activity was on early track for an annualized quarterly contraction of 35.5% (-35.5%) and year-to-year drop of 5.3% (-5.3%). May 2020 Existing-Home Sales Declined 9.7% (-9.7%) in the month (National Association of Realtors® [NAR] at www.nar.realtor – see NAR Press Release there). Existing-Home Sales declined for the third month, down by 32.1% (-32.1%) from its February peak, and by 26.6% (-26.6%) year-to-year. The NAR series reflects greater reporting stability than does the Census Bureau’s New-Home Sales series.(June 17) Monthly Gains in May 2020 New Residential Construction Activity Were Little More Than Dead-Cat Bounces; Second-Quarter Activity Continued in Pandemic-Savaged Collapse (Census). On top of downside revisions, May Building Permits gained a statistically meaningful 14.4% in the month (95% confidence interval), while Housing Starts gained a not meaningful 4.3% on top of upside revisions. Year-to-year declines of 8.8% (-8.8%) for Permits and 23.2% (-23.2%) for Starts were significant. In second-quarter 2020 activity, Permits were on early track for an annualized quarterly decline of 60.7% (-60.7%), and a year-to-year drop of 13.0% (-13.0%); Starts were on track for quarterly and annual contractions of 82.9% (-82.9%) and 24.2% (-24.2%). No major measure of broad real construction activity has come within 20% of recovering its pre-Great Recession peak.(June 16) May 2020 Industrial Production Held its Pandemic Hit / Gained 1.4% in the Month on Top of Downside Revisions, Unchanged Net of Revisions, Down Year-to-Year by 15.3% (-15.3%); Capacity Utilization Revisions Gyrated Around a New Historic Low. (Federal Reserve Board). Following April’s biggest one-month hit in the 101-year history of the Industrial Production series, and Capacity Utilization plunging to a new historic (67-Year) low, the April details revised even lower with the headline May activity. May production and utilization notched higher in the month, on top of downwardly revised April detail, but neither the new May Production nor Capacity Utilization readings topped the pre-revision April readings (see No. 1441).(June 16) May 2020 Real Retail Sales Soared 17.7% in the Month, Up by 20.3% Net of Revisions, Down Year-to-Year by 6.3% (-6.3%) (Census). After April’s headline 73-year record monthly plunge of 15.78% (-15.78%), May Real Retail Sales activity rebounded with a record headline 17.7% gain, 20.3% net of revisions. In the context of still-earlier months’ declines, May 2020 real activity was down by 6.3% (-6.3%) year-to-year. Some aspects of underlying activity such as a 29.1% nominal gain in restaurants and bars was not particularly credible, while the 44.1% jump in May auto sales largely should reverse in the June reporting (see No. 1441).(June 15) The May 2020 Cass Freight Index® Plunged Year-to-Year by 23.6% (23.6%), Deepening from a 22.7% (-22.7%) Drop in April, Just Shy of the Record 25.0% (-25.0%) Great Depression Trough of April 2009. (CassInfo.com, see the updated reporting at https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/may-2020). The Pandemic driven economic collapse continued to hit the May 2020 Cass Freight Index®, with annual declines in freight activity deepening at Great Recession depths. The not-seasonally-adjusted monthly level of May activity, however, did jump by 1.6%, having dropped by 15.1% (-15.1%) in April. Noted by Cass: “We were surprised not to see more of an up-tick ...” See the full report at the preceding link. The Cass Index’s consecutive monthly year-to-year declines and deepening month-to-month declines in the 12-month trailing average held in place for the 18th straight month. Those year-to-year and 12-month-moving-average metrics neutralize seasonality in this unadjusted series. ShadowStats regularly follows and analyzes the Cass Index as a highest-quality coincident and leading indicator of underlying economic reality. We thank Cass for their permission to graph and to use their numbers in our Commentaries (see No. 1441).(June 11) May 2020 Producer Price Index-Final Demand Goods Surged a Series-Record 1.63%, as Monthly Meat Inflation Turned Hyperbolic (BLS). Primarily reflecting a shortage-driven 40.4% explosion in monthly meat prices, which translated into a 5.98% jump in foods, and exacerbated by a 4.52% jump in energy, the monthly increase of 1.63% in the May PPI-FD Goods sector was the highest since the current series was established in November 2009 (see No. 1440).(June 10) May 2020 Consumer Price Index Still Depressed by Energy, Despite Shortage-Spiked Beef Prices (BLS). May CPI-U inflation fell for a third month, down by 0.05% (-0.05%), versus 0.80% (-0.80%) in April, with annual inflation slowing to 0.12% from 0.33%. The annual drop in Energy prices deepened to 18.30% (-18.30%) in May, from April’s 17.35% (-17.35%). Yet, shortages spiked annual Food inflation to 4.00% from 3.50%, with the Beef component of the Food at Home Index jumping 18.2% year-to-year. The Fed’s favored “Core” annual inflation concept slowed to 1.22% in May, from April’s 1.43%, well below the 2.0% FOMC target. Separately, May Real Average Weekly Earnings growth slowed to 0.5% in month, from 5.9% in April, warped by gyrating in heavy layoffs and some rehiring of lower paid hourly workers. May 2020 ShadowStats Alternate CPI (1980 Base) Declined to 7.7% Year-to-Year, from 7.9% in April, On Top of Pandemic Disrupted Surveying and Oil-Price Induced Slowing Growth in the May CPI-U. Related graphs are available to all on the ALTERNATE DATA tab above, also accessible by clicking on the mini-graph below. Subscriber-only data downloads and an inflation calculator also are available there. S Y S T E M I C .. R I S K - Ongoing ShadowsStats Outlook: Economic and Systemic Crashes Should Intensify, Moving Towards a Hyperinflationary Economic Collapse. Economic, FOMC, financial-market, political and social circumstances continue to evolve along with the Pandemic, but the broad outlook has not changed. Systemic turmoil is just beginning, with the Fed and U.S. Government driving uncontrolled U.S. dollar creation, with annual Money Supply growth soaring to successive record highs (see the ALTERNATE DATA TAB and extended discussion in Special Hyperinflation Commentary, Issue No. 1438 and Flash No. 1440).The June FOMC Confirmed Its Extraordinarily Expansive, Accommodative Money Policies, and Its Fed Funds Targeted Rate of 0.00% to 0.25%, Would Continue for the Duration of the Pandemic-Driven Economic Collapse. After reconfirming existing FOMC policies, Fed Chairman Jerome Powell indicated second-quarter 2020 GDP likely faced its deepest quarterly contraction in history, that economic recovery could begin in Second-Half 2020, but also should take years, likely beyond 2022. Yet, the FOMC forecast for a real fourth-quarter 2020 GDP annual decline of 6.5% (-6.5%) [second consecutive quarter of recovery, in theory], would be the deepest in the history of the quarterly GDP series, back to 1948. Much deeper contractions are likely, though, in the still unreported second- and third-quarter 2020 GDP (see No. 1440 and pending No. 1442). SHADOWSTATS ALERT: In context of the evolving Coronavirus Pandemic and related crises, near-term financial-market risks from negative economic, liquidity and political issues, are exacerbated by potential Hyperinflation, long viewed by ShadowStats as the ultimate fate of the U.S. Dollar [again, see Nos. 1438 and 1440]. That said, the ShadowStats broad outlook in the weeks and months ahead continues for: (1) A continuing, rapidly deepening (potentially hyperinflationary) U.S. economic collapse, reflected in (2) Continued flight to safety in precious metals, with accelerating upside pressures on gold and silver prices, (3) Mounting selling pressure on the U.S. dollar, against the Swiss Franc, and (4) Despite recent extreme Stock Market volatility, continuing high risk of major instabilities and heavy stock-market selling, complicated by ongoing direct, supportive market interventions arranged by the U.S. Treasury Secretary, as head of the President's Working Group on Financial Markets (a.k.a. the “Plunge Protection Team”), or as otherwise gamed by the FOMC. P O S T I N G .. S C H E D U L E S .. SHADOWSTATS CONCURRENT ANALYSES OF NEW DATA: The June 2020 Producer Price Index (Bureau of Labor Statistic) will publish Friday, July 10th at 8:30 a.m. ET. ShadowStats analysis should post by 11:30 a.m. ET. SHADOWSTATS COMMENTARIES (Subject to Change): Flash Commentary, Issue No. 1442 should post by late July 7th, reviewing June Labor conditions and other recent reporting. Postings are advised to Subscribers by e-mail, along with appropriate links. ARCHIVES - VIEWING EARLIER COMMENTARIES. ShadowStats postings of April 2020 and before - back to 2004 - are open to all, accessible by clicking on “Archives,” at the bottom of the left-hand column of this ShadowStats homepage. ALTERNATE DATA TAB provides the latest headline data, exclusive ShadowStats Alternate Estimates and related Graphs of Inflation, GDP, Unemployment (updated), Money Supply (updated), and the ShadowStats Financial-Weighted U.S. Dollar (updated).Best Wishes -- John Williams Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting. Primers on Government Economic Reports What you've suspected but were afraid to ask. The story behind unemployment, the Federal Deficit, CPI, GDP. Services include customized forecasts and analyses of the general economy, presentations and consultations in-house for clients. Contact us to discuss your needs. John Williams' Shadow Government Statistics johnwilliams@shadowstats.comTel: (707) 763-5786John WilliamsPO Box 2538Petaluma CA, 94953-2538 Walter J. John Williams was born in 1949. He received an A.B. 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.During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.Although I am known formally as Walter J. Williams, my friends call me John. For 30 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting. One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles.The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it.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. That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present.For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government's statistical agencies. Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades.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.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 clients large and small including talks with members of the business, banking, government, press, academic, brokerage and investment communities.I also have provided testimony before Congress (details here). An old friend the late-Doug Gillespie asked me some years back to write a series of articles on the quality of government statistics. The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started ShadowStats.com (Shadow Government Statistics) in 2004. The newsletter is published as part of my economic consulting services. John Williams

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