The BEA comprehensive revisions combined with August data changes the business cycle picture somewhat. The downturn in personal income ex-transfers and manufacturing and trade industry sales in 2022H1 look a lot bigger.
Category Archives: recession
Recession Forecasts with and without Debt-Service Ratio
In a previous post, I presented forecasts of recession based on probit models using term spread plus short rate, and term spread plus short rate, foreign term spread and debt service ratio. The latter only went of to 2024M03 since BIS only published debt service ratio data up to March. I have extrapolated the ratio to June, so as to obtain the following forecasts.
Some Forecasts of Industrial Production Growth
Forecasts of recession vary with indicators (term spread, foreign term spreads, debt-service ratios). Forecasts of economic activity — as measured by industrial produciton — also differ by predictor.
Some Dubious Coincident Indicators of Recession, Again: VMT, gasoline supplied, EPU vs Heavy Truck Sates and Sahm Rule
Reader Steven Kopits, who as recently as a couple weeks ago argued strenuously that a recession occurred in 2022H1, writes of the Economic Policy Uncertainty Index graph shown in this post:
The Debt-Service Ratio and Estimated Recession Probability
Or, why I still think a recession is possible at 2024H1.
FT-Booth September Survey
The recession’s start is further delayed as forecasted growth continues. FT article and survey results: q4/q4 growth at 2% [1.3%, 2.5% 90%ile range].
Business Cycle Indicators as of Mid-September
Industrial production suprised on the upside on Friday, 0.4% vs. 0.1% Bloomberg consensus. Here’s the picture of key indicators followed by the NBER BCDC, plus monthly GDP.
Nowcasts and Forecasts – Mid-September
GDPNow Q3 revised slightly down (4.9% SAAR), GS about the same (3.2%).
Recession Probabilities (using data through end-2022)
In a project with Laurent Ferrara, we have been examining the properties of financial indicators as predictors of (NBER defined) recessions. In addition to the term spread, we have considered Financial Conditions Indices (Arrigoni-Bobasu-Venditti, Goldman Sachs), the foreign term spread (a la Ahmed-Chinn) and the BIS debt service ratio (suggested by Borio-Drehmann-Xia). Slides from presentation in June here.
The Recession of 2022H1 – Rec Vehicles, but No Spam
Reader Steven Kopits, in response to a posting of alternative indicators, writes: