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 our indicators, a score below 50 signals likely contraction. This month the percentage of primary leading indicators appraised as expanding remained unchanged at 17. As also was the case last month, only two of the primary leading indicators are appraised as expanding—M1 money supply and the yield curve index. The expansionary monetary policy continues to push these indicators upwards. All other primary leading indicators are appraised as contracting. This picture does not suggest an imminent turnaround.

The cyclical score, which is based on separate purely mathematical analysis of the leaders, also remained at 28, unchanged from last month. This also indicates that contraction is likely to continue.

Primary roughly coincident indicators reinforce the view of a continued recession. The percentage expanding remains at zero and the cyclical score has fallen to 15 this month from 23 last month, further supporting the view that the economy is in recession.

Read a general description of our indicators and methods of analysis.

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