Since Friday’s employment release, [1] there’s been a surge in articles discussing the possibility of a recession.
Figure 1: Google Trends index for “Recession”, last 30 days, in Business and Finance category. Source: Google, accessed 6/7, 11PM Pacific.
Time for a look at some key indicators the NBER Business Cycle Dating Committee [1] has looked at in the past.
Five Thirty Eight warns us to prepare for a (not likely imminent) recession; Wall Street Journal‘s Real Time Economics cautions “All Clear on Recession Risk? Not Yet”, even if the latest employment indicate continued growth. Time to review market indicators of the outlook.
I keep on seeing comparisons between the Great Depression and the Great Recession (e.g., [1]), and how a big fiscal stimulus could result in a big and sustained jump in output. I think it useful to visually compare the extent of downturn in both cases.
Today we are pleased to present a guest contribution written by Raju Huidrom, M. Ayhan Kose, Franziska Ohnsorge, and Lei Sandy Ye, all of the World Bank. The findings, interpretations, and conclusions expressed in this article are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.
Our GDP-based recession indicator index is now available from FRED, the database maintained by the Federal Reserve Bank of St. Louis.
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Given worries regarding an imminent slowdown in the wake of the stock market decline, it’s of interest to see what the term premium is signalling.
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 0.7% annual rate in the fourth quarter. That’s a bad quarter to be sure, and real GDP is up only 1.8% from a year ago. That’s a weak year judged by the U.S. postwar average of 3.1%, but is not far from the 2.1% annual growth we’ve been averaging since 2009:Q3.
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We are fortunate to present today a Guest Contribution written by John Kitchen (U.S. Treasury). Any views or opinions expressed are solely those of the author and not of the Treasury Department or any other institution.
With the recent declines in valuations in financial markets, an analysis based on “Relative Valuations of Fixed Capital and Financial Assets in the United States” indicates that we are in a “gray area” regarding the signaling of a heightened risk of recession.
Donald Luskin writes in the Wall Street Journal:
The global economy is slipping into recession. The evidence is showing up in all the usual ways: slowing output growth, slumping purchasing-manager indexes, widening credit spreads, declining corporate earnings, falling inflation expectations, receding capital investment and rising inventories. But this is a most unusual recession– the first one ever caused by falling oil prices.
Industrial production is down. Wisconsin nonfarm payroll employment is down. Global Temperatures hit records in 2014, 2015.