Real Time Probabilities of Recession Above 20% Second Consecutive Month

Seeking to eliminate the enormous lag of NBER in declaring the beginning and end of recessions, economist Marcelle Chauvet computes real-time recession probabilities in a manner consistent with the long after the fact findings of the NBER.

The probability is down from last month, nonetheless Real Time Probabilities of Recession are above 20% for the second consecutive month.

Real-time means a one quarter delay, but that is still faster than the NBER is likely to make proclamations.



click on chart for sharper image

Month/Year	Probability of Recession%
January 2009	100.0%
February 2009	99.7%
March 2009	98.9%
April 2009	94.3%
May 2009	92.6%
June 2009	69.4%
July 2009	41.0%
August 2009	39.3%
September 2009	27.1%
October 2009	18.9%
November 2009	7.9%
December 2009	6.5%
January 2010	4.1%
February 2010	2.4%
March 2010	2.1%
April 2010	1.1%
May 2010	2.8%
June 2010	27.0%
July 2010	20.6%

Note the drop from 69.4% to 41.0% in June/July 2009 accurately timing the end of the recession well in advance of the NBER. Also note the huge leap from 2.8% in April to over 20% in June and July.

For a description of the methodology, please see the Center for Research on Economic and Financial Cycles post CREFC Real Time Probabilities of Recession.

Also see Real Time Analysis of the U.S. Business Cycle

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List