Macroscope
RU
RU
Loading findings…

  1. ForecastsUnited States

    Before 7 of 8 US recessions, next-quarter GDP decline odds were below 25%

    8US recessions since 1969
    1times forecasters gave a downturn 25% or more a quarter ahead

    probability of a decline next quarter, Philadelphia Fed survey

    0%50%196820272000

    In August 2007: 17%, and the recession began 5 months later; in August 2019: 14%, 7 months later.

    Source: Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters; actual: BEA and BLS; recessions: NBEROpen on the chart →
    More

    The Survey of Professional Forecasters: each quarter since 1968 the Federal Reserve Bank of Philadelphia asks several dozen economists at banks, firms and research centres for their forecasts of growth, unemployment, inflation and the probability of a downturn. Here: the average probability of a fall in GDP next quarter (the “anxious index”) in each survey.

    The line is the anxious index in each survey since 1968. Red bands are recessions as dated by the NBER. Dots mark the survey in the quarter before the NBER peak quarter. The dashed line is 25%.

    The anxious index is the participants’ mean probability that US real GDP falls in the quarter after the survey (RECESS, next quarter). Recessions: NBER peak and trough dates; “a quarter before” is the survey in the quarter preceding the peak quarter.

    A quarterly GDP decline is not an NBER recession. This is a timing comparison, not a calibration test. Testing probabilities requires all quarters, including quiet ones, and outcomes with the same event definition. NBER dates recessions after the fact.

    A question for this picture

    How well calibrated are these probabilities for quarterly GDP declines across all quarters?

More findings

All findings →