Note from dshort: With this morning’s release of the Consumer Price Index for September, we can now calculate Real Retail Sales for last month.
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 Today’s report of 214K new nonfarm jobs was a bit lower than most economists had forecast, but the lower number was more than offset by upward revisions to the new jobs for August (from 180K to 203K) and September (from 248K to 256K). The unemployment rate dropped a notch from 5.9% to 5.8%.
Nonfarm Employment, especially after the revision of the two previous months, is the least volatile of the Big Four. As we can see in this snapshot of the monthly percent change since 2000.
This post was published at FinancialSense on 11/07/2014.