Trends in Key Recession Indicators
Submitted by Econbrowser
Since December 2007 is a commonly identified turning point [1], [2], I thought it would be of interest (given Jim’s take on whether it matters if we’re in a recession) to see what the indicators that the NBER BCDC focus on — payroll employment, industrial production, real personal income less transfers, real manufacturing and trade sales, and to a lesser extent monthly real GDP — are doing. They’re declining…
Figure 1: Log payroll employment (blue) and log industrial production (red), both normalized to 0 in 2007M12. Green shaded area is conjectured recession dates. Source: Federal Reserve Board via St. Louis Fed FRED II, accessed 8 June 2008.
Figure 1: Log personal income less transfers in Ch.2000$ (blue) and log manufacturing and trade sales in Ch.2000$ (red), both normalized to 0 in 2007M12. Real personal income calculated by subtracting off transfers from personal income, and deflating by the personal consumption expenditure deflator. Green shaded area is conjectured recession dates. Source: BEA GDP release of 29 May, and Supplemental Table 2BU, and St. Louis Fed FRED II, accessed 8 June 2008, and author’s calculations.
Figure 3: Log GDP in Ch.2000$, normalized to 0 in 2007M12. Green shaded area is conjectured recession dates. Source: Macroeconomic Advisers [xls], May 15, 2008 release.One point to keep in mind, when comparing against previous downturns: for the last few months, the indicators are either preliminary or once/twice revised, while viewing back in time, one will be looking at final, revised, data. For the issue of vintage data and revisions, see these posts (see Creative Destruction, as well as these posts [3], [4], [5]). To access vintage data, see the St. Louis Fed’s ALFRED system.
With that caveat in mind, it looks to me like we’ve passed at least a local maximum, and indicators are trending down.
Visit 1800blogger to see all of our industry leading blogs.
Are you an investor? Have something you want to say about the economy? Register on Econoimist Blog now and get published within minutes. Before posting, it is recommended that you review our posting guidelines.
