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In early 2001 (April or Might) I used to be on employees at CEA, and recall a dialog the place I used to be assured there’d be no recession, given the newest information obtainable. So, with all the information I’ve recapped, keep in mind, the information will likely be revised (and GDP specifically will likely be revised, over and over).
As Wang and Orlick level out, earlier than every of the newest recessions, a substantial quantity or analysts suppose we’ve got dodged a bullet.
Supply: Wang, Orlick, Bloomberg, Oct 1, 2023.
Right here’s the evolution of estimates of GDP contours across the 2001 recession (I’m self-plagiarizing from this put up).
Determine 1: GDP in billions Ch. 1996$ SAAR. NBER outlined peak and trough dates at dashed strains. 6/29/22 GDP calculated dividing nominal GDP by GDP deflator rescaled to 1996=100. Supply: BEA by way of ALFRED, NBER, and writer’s calculations.
The primary studying of GDP at then finish of April 2001 allowed folks to breathe a sigh of aid – q/q annualized development was round 2%:
Determine 2: Quarter-on-quarter annualized actual GDP development. NBER outlined peak and trough dates at dashed strains. Supply: BEA by way of ALFRED, NBER, and writer’s calculations.
That constructive studying remained true by means of the second and third releases. The advance studying for 2001Q2 was additionally constructive. This remained true by means of the second and third releases, and solely in Q3 did the advance studying go detrimental, and stay so. Nonetheless, the advance This autumn studying (1/30/2002) was constructive — so there was no two-consecutive-quarter string of detrimental readings.
Solely with the advance 2002Q2 launch — incorporating the annual revision — did we get consecutive detrimental readings, on this case three quarters, beginning Q1 operating by means of Q3. The annual revisions alter the previous 5 years of GDP estimates (see right here).
Nonetheless, each 5 years, the BEA undertakes complete revisions, incorporating the newest information. This as soon as once more modified the contours of GDP – as proven in Determine 1 and Determine 2. As the newest sequence present, there are not any consecutive quarters of detrimental development. And but, the NBER declared a recession operating from (peak-to-trough) March 2001-November 2001, 2001Q-2001Q4 (recession announcement November 26, 2001, enlargement announcement, July 17, 2003).
So, it’ll be some time earlier than I say with confidence that there’s no recession, on the premise of GDP a minimum of. Different indicators could give an all clear a lot sooner. (In fact, this additionally means I’ll be reluctant — too reluctant for some — to declare a recession underway).
Then again, I nonetheless suppose it extremely unlikely there was a recession of 2022H1.
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