After the recent economic data and the potential deterioration of the economy in the U.S., how does the current context compare to prior periods where the U.S. entered a recession? The table below shows 6 indicators from the National Bureau of Economic Research in prior recessions, the average, the median, and the current reading for each one. Two conclusions can be drawn from the table: (1) at the start of a recession, most indicators do not offer a grim picture, in part because they’re backward looking figures. (2) if these indicators had any predictive power, we could argue that according to current readings, the U.S. economy is about to enter a recession. But it’s not that simple. It depends on the actions and the response by the Fed, Congress, corporations and the consumer to actually fulfill the prediction.
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