While monthly decreases happen all the time, a long-term decline in yearly production averages has been in place since September 2015.
When the yearly averages are placed on a graph and compared with US recessions since 1960, there is a clear correlation between long term industrial decline and recessions.
A decline in the yearly average can occur before a recession, or during a recession, as the graph below shows.
Note that I define a recession different to the NBER, but there is an overlap.
Here is how it appears on my spreadsheet:
1 comment:
Hi. I duplicated your graph & data. All the numbers are negative since September 2015, as you said. Looks like it's trending back up this year, though. The low point is pretty shallow, similar to the June 1960 low visible on your graph. Maybe we'll avoid recession if it keeps going up now. There was a recession in '61 but that was after a second, much deeper low.
I recently looked at the US unemployment rate. It shows a very consistent pattern: Where there is a bottom, it is followed by recession. We appear to be at such a bottom now.
But that is in doubt because the Labor Force Participation Rate has been going up lately. This affects the unemployment number. So I looked at the employment number instead.
Percent change in employment shows a downtrend before the recession, for every recession since 1949. But it is not showing downtrend now. So I think: no recession.
Hey, under "My Selected Articles" in your sidebar: "Using the monetary base as a recessionary indicator". I like it! You wrote:
"Recessions occur whenever the spread between the Net Monetary Base and Inflation is negative. A negative result implies that inflation is greater than the increase in the money supply, which means that a real deterioration in purchasing power occurs."
I'm gonna play around with that for a while. Nice work.
Art
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