The Big Four Economic Indicators: Updated Real Retail Sales and Industrial Production
Guest post by Doug Short.
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.
There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:
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The weight of these four in the decision process is sufficient rationale for the St. Louis FRED repository to feature a chart four-pack of these indicators along with the statement that “the charts plot four main economic indicators tracked by the NBER dating committee.” In his July 10thBloomberg TV interview, ECRI’s Lakshman Achuthan cites these four in his remarks. He says, and I quote “When you look at those four measures, they are rolling over.” On September 13th Achuthan again reappeared on Bloomberg TV and reasserted the ECRI recession call, stating again that the US is already in recession and that future revisions to the data will support their call. See the last 30 seconds of the interview for comments on downward revisions.
The Big Four
Update of the “big four” indicators. Courtesy Doug Short.
The weight of these four in the decision process is sufficient rationale for the St. Louis FRED repository to feature a chart four-pack of these indicators along with the statement that “the charts plot four main economic indicators tracked by the NBER dating committee.” In his July 10thBloomberg TV interview, ECRI’s Lakshman Achuthan cites these four at about the 2:05 minute point in his remarks. He says, and I quote “When you look at those four measures, they are rolling over.”
Are they really rolling over? First, here are the four as identified in the Federal Reserve Economic Data repository. See the data specifics in the linked PDF file with details on the calculation of two of the indicators.
The Big Four Economic Indicators – What They’re Telling Us About the Economy
Guest post by Doug Short.
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.
There is, however, a general understanding that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:
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