As I have observed before, the explanation for why we have not yet seen a recession’s onset in the data yet could be one of the following: (1) the model based on historical correlations is no longer applicable (DGP has changed), (2) we were using the wrong model, (3) the recession is yet to come, but has not yet shown up in the data. In addition, it could be the model was right, and in a probabilistic world, there’s never a sure thing.
Category Archives: recession
The Declining Driving Miles Intensity of GDP
Trend shifted down, but sensitivity up.
Business Cycle Indicators for October, Including Monthly GDP
Here are key indicators followed by the NBER’s Business Cycle Dating Committee (top indicators employment and person income) plus monthly GDP from S&P (nee Macroeconomic Advisers nee IHS Markit):
Three Measures of Output
GDP, GDO, GDP+:
Business Cycle Indicators for Biden’s Economy in October
One of the last snapshots of the Biden economy show real consumption and personal income rising, with consumption rising 0.6% (vs. consensus of 0.3%), and faster than inflation. Here are some key indicators followed by the NBER’s Business Cycle Dating Committee.
The Echo Chamber of Stupid: “Recession since 2022”
Daniel Lacalle via Zerohedge writes Continue reading
What Does the Term Spread Predict? IP, GDP, Coincident Index?
It’s commonplace to correlate term spreads with future economic activity measured one way or thSo, while other. Recessions in the US do seem to be predictable on the basis of term spreads; but recessions are a binary variable insofar as the NBER, ECRI, and other institutions define it. What about growth as a continuous variable — be it growth of GDP or industrial production?
Business Cycle Indicators – Mid-November
Industrial and manufacturing production down at consensus rate (-0.3% m/m for both). Core retail sales +0.1% vs. consensus +0.3% m/m. First up, series followed by the NBER’s Business Cycle Dating Committee (personal income and employment are key):
Trade War and Recession?
Former Senator Toomey (Politico):
“We have a recession coming. That’s what the response would be from a full-blown trade war that [Trump] would precipitate,” Toomey said, referring to the president-elect’s trade proposals. Those include tariffs of up to 20 percent on all imports, tariffs of at least 60 percent on China and more radical positions such as swapping the income tax with tariffs.
The Recession Call Revisited
There was a noisy minority of analysts thinking we were in, or imminently in, recession (see a list here). It’ll be interesting to see how those views are revised. However, as I noted, while the data was not supportive of being in a recession as of October, three possibilities could reconcile observations with such views: (1) the model is wrong, (2) the recession is here, but we don’t know it, or (3) the recession is still to come.