Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.
There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:
Industrial Production Real Personal Income (excluding Transfer Payments) Nonfarm Employment Real Retail Sales The Latest Indicator Data With this morning’s release of the September Consumer Price Index, we can now calculate Real Retail Sales. I reported the nominal Advance Retail Sales last week, which showed September at -0.3% (-0.32% at two decimals) month-over-month, down from 0.6% in August. That was much worse that the mainstream forecasts. When we adjust for inflation, September sales came in even worse at a -0.41%. The chart below illustrates the series since 2009 with a linear regression to help us analyze the trend.
This post was published at FinancialSense on 10/22/2014.
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