Springtime for US Economy Could Start This Month
Trough of the US recession: May 2009?
If we refine the NBER weekly trough date to be the third week in the NBER trough month, then in four of the past five recessions the new claims peak leads the NBER weekly trough by a range of only four to six weeks, and in the fifth recession the new claims peak lags the NBER weekly trough by two weeks. Since new claims have recently reached a peak in the week ending 4 April 2009, it is tempting to conclude that the monthly trough of the US recession could come as early as the middle of May 2009 – a date earlier than most analysts appear to expect.
If we refine the NBER weekly trough date to be the third week in the NBER trough month, then in four of the past five recessions the new claims peak leads the NBER weekly trough by a range of only four to six weeks, and in the fifth recession the new claims peak lags the NBER weekly trough by two weeks. Since new claims have recently reached a peak in the week ending 4 April 2009, it is tempting to conclude that the monthly trough of the US recession could come as early as the middle of May 2009 – a date earlier than most analysts appear to expect.
Bottom Line: My reasoning leads me to conclude that the ultimate NBER trough of the current business cycle is likely to occur in May or June 2009, substantially earlier than is currently predicted by many professional forecasters.
~Northwestern economist Bob Gordon, also a member of the NBER Business Cycle Dating Committee since 1978
HT: Newmark's Door
4 Comments:
Bold and insightful post. Are people ready to hear the good news yet? I for one AM!
Kudos to the professor.
The problem with this, of course, is that I don't think Obummer wants the recession to end yet, because he wants to use the emergency to try to get his various statist ideas through congress and then be able to claim those things helped the economy. I think that is one of the reasons why he pushed the so called "stimulus" bills through congress so quickly -- he was afraid things would start getting better too quickly and loose his chance to appear to be the one that fixed it.
So, I expect some more negative talk very soon - something vague, but enough to push the market back down a bit. Healthcare nationalization might do it. Maybe another health scare? Global warming initiatives? Something involving 100s of billions of dollars for nonsense, I am betting.
Marko,
I think the so-called bank stress tests are what you are describing.
The Fed says Wells Fargo needs to raise capital, while Warren Buffet says Wells passed his own stress test.
Who do you believe?
Is the govment ginning up fear in order to prolong the crisis?
One thing I find rather magical, is that the only one of the other examples that does NOT fit the model is the only other recession where drastic government stupidity was used in place of market efficiency in cleaning up the mess.
I wonder what we can conclude from that?
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