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.
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: