Recession Evidence Obscured in Real Time
In recent weeks, several key coincident indicators have surprised the consensus to the upside, bolstering the belief that the U.S. economy has dodged recession. Even though the latest releases may show increases, earlier data have almost uniformly been revised downward, a reality largely ignored by many. For example, after revisions, there is a net gain of only 55,000 jobs in today’s payroll jobs report, which is itself subject to further revisions.
Amid these cross currents, ECRI has completed an in-depth study of after-the-fact revisions to coincident indicators, revealing that they themselves display distinct patterns around business cycle turning points.
With preliminary data often obscuring real-time evidence of recession, our analysis underscores the importance of having an array of robust leading indexes for real-time monitoring of the economy.