Courtesy of Mish
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%|
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.