The probability that the U.S. economy is experiencing a new economic recession remains below 5%, according to the latest value of the quarterly real-time GDP-based recession probability index.
Based on the GDP figures released by the Bureau of Economic Analysis on May 26, 2005, the quarterly real-time GDP-based recession probability index stood at 3.4 for the fourth quarter of 2004. The index can be interpreted as the probability that the economy was beginning an economic recession at that date. This marks the sixth consecutive quarter that the index has remained below 5%, and confirms that the economic expansion that began in the first quarter of 2002 continues with no signs of weakness on the horizon at the present time.
This index uses the statistical principle known as Bayes Law to compare the recent behavior of GDP growth with the values that have been observed during historical recessions. Technical details of the construction and performance of the index can be found here