The current recession, which started in December 2007, has now lasted for 14 months, thus far making it the third longest recession in post-war history. For now, at least, it clocks in behind the recessions of 1973-75 and 1981-82, both of which lasted for 16 months. But AIER’s statistical indicators of business-cycle conditions continue to point to continuing contraction.   With all o...

In January, the economy entered the second year of its recession. The magnitude of the downturn is not unprecedented by any means. Several of the past recessions brought larger decreases in gross domestic product and higher levels of unemployment. But the speed of the current deterioration is daunting. The bulk of it took place in the last quarter of 2008. AIER’s statistical indicators of busine...

The National Bureau of Economic Research, the nonpartisan group charged with making the call, announced Monday that U.S. economy entered a recession in December 2007. AIER’s statistical indicators, in contrast, warned about a recession months before its official start date and more than a year and a half before NBER’s official announcement. We first wrote that the recession was likely, based...

AIER’s primary leading indicators of business-cycle conditions continue to signal that economy is in a recession.The percentage of primary leading indicators appraised as expanding decreased to 30 this month, down from 40 last month. A score below 50 indicates that recession is more likely than recovery. One of the leading indicators, new housing permits, fell to the lowest level in the history...

AIER’s primary leading indicators of business-cycle conditions continue to signal a recession. The percentage of primary leading indicators appraised as expanding held at 40 this month. A score below 50 indicates that a recession is likely. One of the leaders, the M1 money supply, increased by nearly $60 billion, the highest ever one-month increase. This increase is the result of unprecedented...

AIER's primary leading indicators of business-cycle conditions continue to indicate that a recession is likely. The percentage of leaders appraised as expanding held steady at 40 this month, unchanged from last month. One of the leaders, initial claims for unemployment insurance, topped 400,000 for the first time in five years.  Another, new housing permits, decreased to an annual rate of...

Our primary leading indicators of business-cycle conditions continue to indicate that a recession is likely. The percentage of leading indicators appraised as expanding increased from 33 last month to 40 this month. But it is still below 50, which suggests that a business contraction is probable. Separately, the AIER cyclical score, which is based on a purely mathematical analysis of ...

AIER uses analysis of long-term and monthly data for each of 24 selected statistical series to calculate the likelihood of shifts in the business cycle. Through appraising and comparing each of our 12 Leading Indicators, 6 Coincident Indicators and 6 Lagging Indicators, we calculate a score for the percentage of leading indicators that are expanding. Part Three of our four-part web series abou...

AIER’s method of forecasting changes in the business cycle starts with collection of the most recent monthly data (or quarterly data where applicable) for each of 24 selected statistical series. In Parts One and Two of this four-part web series about our forecasting methods, we described each of our 12 Leading Indicators, 6 Coincident Indicators and 6 Lagging Indicators. In this installment,...

The latest batch of data indicate that the economy is weak and the outlook remains poor.  Most of our 12 Leading Indicators continue to contract, and we downgraded our appraisal of the cyclical status of one series. As a result, the percent of leaders appraised as expanding decreased from 38 last month to 33 this month. A percentage below 50 indicates that a recession is probable. H...

Many techniques have been developed for predicting changes in economic activity. AIER relies on a system using statistical indicators. We have found that analysis of selected statistical series to be useful in forecasting reversals in business cycles just prior to or shortly after their occurrence and in forecasting continuations of trends. The method behind using statistical indicators is to ...

Business cycles are alternating waves of expansion and contraction of business activity. Although cycles are recurrent (but not periodic), both their duration and intensity vary greatly. In addition, cycles occur across most business sectors simultaneously. No two business cycles are exactly alike.   AIER has developed a system for forecasting changes in business cycles and publishes the res...

In April 2007, we first forecast that a recession was likely. This month our economic indicators show for the first time that a business contraction probably has begun. We rely on six coincident indicators to tell us whether the economy is currently expanding or contracting. This month, the percentage of coinciders expanding cyclically fell to 40.  A percentage below 50 indicates the economy i...

Our twelve leading indicators of business-cycle conditions have improved somewhat since the beginning of the year but they still point to recession. The percentage of leading indicators appraised as expanding (an index that reflects the judgments of AIER's research staff) increased to 44, up from 33 last month. When less than 50 percent are expanding, a recession is probable. In January, howev...

Gross Domestic Product expanded at a 0.6 percent annual rate during the first quarter, the same pace as during the fourth-quarter and substantially slower than the 3.4 percent average since World War II. Overall, the latest batch of economic data showed little change in the cyclical trends of our leading indicators of business-cycle conditions this month. The percentage of leaders appraised as e...

The outlook for business activity did not deteriorate this month as much as might have been expected, given the drumbeat of negative news since our last report. Our latest batch of data does not offer much hope for optimists, but does not provide much fodder for gloom-and-doom pessimists either. Despite changes in the appraisals of three leading indicators of economic activity, the percentage of...

Gross Domestic Product growth (GDP) slowed to an annual rate of 0.6 percent in the fourth quarter of 2007 according to yesterday’s release from the Bureau of Economic Analysis. AIER employs GDP as one of six coincident indicators of business cycle activity to show us where the economy actually is, and usually to provide confirmation of trends previously signaled by the leading indicators. Sinc...

Lagging indicators of economic activity are given the least attention by the media.  Lagging indicators are those that turn consistently after turns in business-cycle activity. For example, a lagging indicator will reach its peak after the business cycle has peaked (i.e. after a recession has begun) and will reach its trough after the business cycle has reached its trough (i.e. after an expans...