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"Insensibly one begins to twist facts to suit theories, instead of theories to suit facts."        — Sherlock Holmes, A Scandal in Bohemia
Refinements and Adjustments

April 1 2022: The Chicago Fed National Activity Index (CFNAI) has been given a weight that is one-fourth of other indicators. Since the COVID economic shutdown, the CFNAI has been prone to large swings, causing it to overly influence the MoC. 

March 26, 2022: In the % From Baseline table, on the smaller % MoC From Baseline Prior to Typical Recession table, the MoC values prior to the 1990 - 1991 recession were added. The average is now weighted, with the most recent recessions being more heavily weighted.

March 4, 2022 upgrade: The OECD business confidence index has been added to the BaR replacing the ISM manufacturing and services index. The OECD business confidence is preferred because it has the behavior of a leading indicator and it is sensitive to the mini-cycles that occur during all business cycle expansions. Tracking mini-cycles is especially important for investors as the stock market historically declines during the downward period of a mini-cycle. There are often two or three notable mini-cycles during a period of economic expansion. In addition, the yield curve spread has been changed from the 10-year Treasury note minus 3-month Treasury bill to the 10-year Treasury note minus 2-year Treasury note. Two-year notes are influence largely by market forces rather than Fed manipulation and a better indicator of economic trends. 

2022 baseline resets: For some indicators, baselines differ from one business cycle to another. As more data is collected during an expansion, their baselines are adjusted to better estimate where the indicator is likely to be at the start of the next recession. Baselines have been reset for private building permits and weekly unemployment claims.

Temporary employment data revision: At the beginning of February 2022, the Bureau of Labor Statistics adjusted employment data. Temporary employment numbers were increased, placing this indicator at a higher position above the baseline.

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