Free Economic Charts



 

Forecasting The Next Recession

 

Investing in the right asset classes & sectors at the right stage in the business cycle is one of the most important drivers of performance for investors.  The same is true by knowing which asset classes and sectors to avoid and when.  What’s more, this “timing factor” may indeed have the greatest impact on your financial future.  While predicting market downturns and recessions may be a challenge, it is possible to get an early read on forecasting the next recession by analyzing historical data and late-cycle patterns of key economic and market indicators.   

The current analysis, as of April 10th 2018, suggests no immediate recession in the next 6 months.  However, it is possible that we experience a market-driven sell-off in the next 6 months.  Looking out 12 months and beyond, the probability of a recession increases, with an above-average probability occurring in 18 months – 36 months.


1. GDPNow Forecast

 

 

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 2.3 percent on April 5, down from 2.8 percent on April 2. The nowcast of the contribution of inventory investment to first-quarter real GDP growth fell from 1.21 percentage points to 1.05 percentage points after yesterday’s manufacturing release from the U.S. Census Bureau and yesterday’s light vehicle sales release from the U.S. Bureau of Economic Analysis (BEA). The nowcast of the contribution of net exports to first-quarter growth declined from -0.65 percentage points to -0.72 percentage points after this morning’s international trade release from the Census Bureau and the BEA. The nowcast of first-quarter real consumer spending growth fell from 1.6 percent on April 2 to 1.3 percent this morning.

 


2. Gross Domestic Product

2017: 2.3

Updated: Mar 28, 2018

 


3. Unemployment Rate

Mar 2018: 4.1

 

 


4.   Non-Farm Payrolls

Mar 2018: 148,230


5.   Four-Week Moving Average of Initial Claims

2018-03-31: 228,250


6.   Commercial and Industrial Loans, All Commercial Banks

 Feb 2018: 2,122.0270   Billions of U.S. Dollars


7.  Total Unemployed, U6

Mar 2018: 8.0


8.  Consumer Price Index

Feb 2018: 2.3


9.  Personal Consumer Expenditures

Feb 2018: 4.6


10.  Industrial Production Index

Feb 2018: 4.3


11. Kansas City Fed Labor Market Conditions Index, Level of Activity Indicator 

Feb 2018: 0.65551


12.  Manufacturers’ New Orders: Durable Goods

Feb 2018: 247,255


13.  Total Construction Spending

Feb 2018: 1,273,085   Millions of Dollars


14. Leading Index for the United States

Jan 2018: 1.57


15. Velocity of M2 Money Stock

Q4 2017: 1.432


16. Total Vehicle Sales

Feb 2018: 17.4    Millions of Units

 


17. Federal Debt to GDP

Q4 2017: 103.73920


18.  Federal Debt:  Total Public Debt

Q4 2017: 20,492,747     Millions of Dollars


19.  New One Family Houses Sold

Feb 2018: 618     Thousands


19.  Corporate Profits

Q4 2017: 1,680.250     Billions of Dollars


19.  Effective Fed Funds Rate

Mar 2018: 1.51


19.  Aaa Corporate Bond Yield Relative to Yield on 10-Year Treasury Constant Maturity

2018-04-06: 1.01


 Source:  Federal Reserve, St. Louis Federal Reserve, Atlanta Federal Reserve, US Treasury & U.S. Bureau of Economic Analysis