May 30, 2003
Experimental Coincident, Leading and Recession Indexes
I think this is very interesting. These are three experimental indexes for determining the probabilities of being in recession.
The Coincident Index looks at four measures of economic activity
- Industrial Production
- Real personal Income, total, less transfer payments
- Real manufacturing and trade sales, total
- Total employee-hours in nonagricultural establishments
The index was set to equal 100 in 1967. This index does not yeild a probability, but it gives you an idea of economic growth that is taking place.
The next index is the Experimental Leading Index gives you a forecast of the Experimental Coincident Index six months out. It relies on seven leading indicators
- Housing BP: Housing authorizations (building permits) -- new private housing.
- MD Unf Ord: Real manufacturers unfilled orders: durable goods industries (smoothed).
- Exchange Rates: Trade-weighted index of nominal exchange rates between the U.S. and the U.K., Germany, France, Italy, and Japan (smoothed).
- Part Tim Wk: Number of people working part-time in nonagricultural industries because of slack work (smoothed).
- 10Yr TBond Rate: The yield on a constant-maturity portfolio of 10-yr U.S. Treasury bonds (smoothed).
- 3mtCP,3mtTB Spr: The spread (difference) between the interest rate on 3-month commercial paper (financial) and the interest rate on 3 month U.S. Treasury bills.
- 10yrTB,1yrTB Spr: The spread (difference) between the yield on constant-maturity portfolio of 10-yr U.S. Treasury bonds and the yield on 1-year U.S. Treasury bonds.
The last index is the Experimental Recession Index which returns the probability that the economy will be in recession six months from the date of the index. Thus if the index for January is say 25% that means in June the probability of being in recession is 25%.
For March 2003 the Experimental Recession Index is 12%. In other words, the probability of the economy being in recession in September is 12%.
Posted by Steve at May 30, 2003 09:52 AM"Classified ads at lowest level in 41 years."
http://www.stltoday.com/stltoday/business/stories.nsf/Business%20News/6B3ED6FAED035B4F86256D36000DE8EE?opendocument&Headline=Help-wanted%20advertising%20falls%20to%2041-year%20low%20as%20firms%20delay%20hiring
But there's no recession.
Posted by: barney gumble on May 30, 2003 01:05 PMBarney...where did I or anybody else claim that there is currently no recession?
Steve, Barney's nothing but a troll. Didn't you ban him once?
Posted by: Robert Crawford on May 30, 2003 02:15 PMI was exaggerating for emphasis, as a way of punctuating my point, that you appeared to be discounting the severity of the recession.
Statements like:
"The harping on Bush for the unemployment is also over the top too, IMO. Yes, unemployment has risen, but is it bad?"
and
"In other words, the probability of the economy being in recession in September is 12%."
Led me to believe so.
Deinonychus needs dissenting views, or else it is just a mutual masterbation society for Steve, Robert, and Dean.
Robert: You still need commenting at Kloognome.
Dean: Did you know 'gullibility' is one of those words that everyone thinks is in the dictionary, but really isn't?
Posted by: barney gumble on May 30, 2003 03:58 PM"Robert: You still need commenting at Kloognome."
Why? So I'll spend hours deleting crap from trolls like you?
Jesus, Barney, yours seems to be just you recounting comments you made on other people's sites.
Posted by: Robert Crawford on May 30, 2003 04:22 PMLed me to believe so.
Oh...so in other words, no, nobody here said anything about there not being a recession. What I did write that the unemployment is not that bad by historical standards (which is a fact as seen by the graphs. Did you look at the Barney?).
Also, what does being in a recession now have to do with being in recession in September (six months from now).
So basically Barney...you have misrepresented what I have written.
Finally, do you know anything about the dating of recession troughs Barney? Do you know when the recession that started in 1990 ended? It ended in March 1991 (i.e. under Bush...Bush helped end that recession, not Clinton). However, the release date for when the Dating Committee at NBER was in December 1992...22 months later.
Now it is possible, although unlikely, that we are currently out of the recession. I don't personally think this is the case, but it could happen any time in the next few months.
Next time try to keep your comments intelligible Barney.
Posted by: Steve on May 30, 2003 08:46 PMStill, I would hope - obviously futilely - that Gumble would learn the meaning of words he uses.
Posted by: Robin Roberts on June 1, 2003 11:50 PM