Floyd Norris asks, "First Birthday for the Recession?"
"The National Bureau of Economic Research has yet to certify there is a recession, but otherwise there is no doubt.
The Conference Board
released its index of coincident indicators. That index not only
confirmed that a recession is under way, but it provided powerful
evidence that it began in 2007, or in January 2008 at the latest.
Here’s why: The overall index of coincident indicators is down 1.2 percent from
its record high, set in October 2007. Since 1960, every time the index
has fallen by at least 1 percent, the bureau later concluded the
economy was in recession . . .
In the seven recessions since 1960 — the only ones during which the
index of coincident indicators was calculated — the bureau later
concluded that the recession began within two months of the beginning
of the decline in the coincident indicators. This time the index began
to decline in November 2007. So the possible range is from September to
In all likelihood, this recession either has reached its first birthday or will soon do so."
I do not disagree with either Floyd or the coincident indicators.
On a partially related note, thank you to the many birthday wishes I have received from so many of you — your thoughtful notes and generosity have been greatly appreciated.
First Birthday for the Recession?
Floyd Norris, High and Low Finance, October 20, 2008, 1:49 pm
Recession Fears Sink Europe Stocks
WSJ, OCTOBER 22, 2008, 12:03 P.M. ET