Just the facts...
|Baseline and Rate of Change (BaR) Analysis Grid©|
|The BaR Analysis Grid© clarifies current economic conditions and signals how near the economy is to a recession. The mean of coordinates (MoC) is the average of all plotted points. It indicates the overall health of the economy. Leading indicators (LD) provide insight into current trends (business cycles are comprised of multiple mini-cycles). Click here to learn how to read the BaR grid. The BaR is update every Friday.
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|Click on arrows to see how the current business cycle has progressed since the last recession.
|July Data Updates: 8/12 to 8/16: Total vehicle sales, NFIB small business optimism, retail sales, industrial production, and capacity utilization; 8/5 to 8/9: ISM nonmanufacturing, nonfarm job openings, nonfarm hires, St. Louis Fed Financial Stress Index, unemployment claims; 7/29 to 8/2: Yield curve spread, University of Michigan consumer sentiment, ISM manufacturing, Credit Managers' Index, and temporary employment
Yield Curve Inversions:
2-yr/10-yr inversion: Brief inversion occurred on 8/14
3-mo/10-yr inversions: 3/22 - 3/28; 5/23 - 7/22; 7/24 - ?
Facts to know: Continuous 3-mo/10-yr inversion periods of at least one month have led the last three recessions by 13, 8, and 17 months respectively. Since the late 1970s, one or more brief inversions have occurred prior to longer, continuous inversions. The earliest, brief 3-mo/10-yr inversions occurred, respectively, 15, 30, and 21 months prior to the last three recessions. In addition, normally the 2-yr/10-yr curve inverts prior to the 3-mo/10-yr. That did not happen during this business cycle. To understand more about yield curve inversions, read here.
|Percent from Baseline: 3-Month and 1-Year Trends|
|Three-month trends shows some improvement, yet year-over-year measures are mostly down. However, both the MoC and leading indicators remain well above the baseline (recession indicator). Updated 8/16. Next update 8/30. To see previous tables go here.
Note: The BEA has adjusted corporate profits, which slightly lowered the MoC. The current table includes these adjusts for all included months.
|Current Business Cycle
(See other business cycles)
|Q: For 1Q 2019, why is the BaR showing a decrease in the rate of growth while GDP increased 3.1%?
A: The BaR rate of change is influenced by sentiment measures and economic indexes. The BaR captured increased pessimism and lowered expectations among small business owners, consumers, credit managers, and purchasers. This is evident in the slowdown in consumer spending during the quarter. Even so, the MoC is well above the baseline, signalling that the economy remains relatively strong.
|The problem with putting two and two together is that sometimes you get four, and sometimes you get twenty-two.” ― Nick Charles, The Thin Man|