My spreadsheet is indicating that the US had two short recessions in 2016: 2016 Q2 and 2016 Q4.
Now of course this is really weird, so I want to put it out there just as a way of discussing the data or even finding out why my spreadsheet is wrong. I've checked the data against the FRED data (because data has a habit of being updated) and so far the problem doesn't seem to be my spreadsheet or incorrect cell algorithms.
The way I measure recessions is influenced by three things:
1) That Real GDI should be used instead of Real GDP. (
2) That the data should be adjusted per capita.
3) That the data covers a 12 month period, as opposed to a 3 month period.
The reason for #1 is based on this 2007 paper from the Fed (pdf file)
The reason for #2 is that it is possible for population to grow faster than the economy, which means that while the economy may grow in absolute terms, the per capita data might show a decline.
The reason for #3 is that recessions are generally long term events that come to a head. Quarterly changes are important to note, but changes over a 12 month period are to be preferred as being more judicious.
I thus measure recessions as being: An annual decline in per capita Real GDI.
So when I punched in the data into my spreadsheet just today, I discovered that 2016 Q2 and Q4 saw annual declines in per capita Real GDI. Considering all my other recession indicators were silent about this, the cart seemed to be in front of the horse.
But what I did notice was that this seems to fit in with one of my earlier posts this year, in which I pointed out that US Industrial production declined in 2016.
Now if there were two mild recessions in 2016, they did not cause an increase in unemployment, though rates were slow to drop (4.9% in Q1 to 4.7% in Q4)
A screenshot of my spreadsheet is here. A screenshot that includes 2004-2011 is here.
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Australia's unbroken economic growth could be about to end, if China's economy suffers a downturn. It could be nasty. That's what a columnist in the Herald Sun in Melbourne thinks.
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