|
||
Many people in this day and age are concerned about theprospect of a recession in the not distant future. If that is the case, you may be wonderingwhat are some of the predictors of a recession. Through this article you are provided a brief overview of some of the predictors of a . By coming to a basic understanding of thisinformation you will be in a better position to understand whether or not arecession is in the offing.
At the outset it is important to keep in mind that not oneof the predictors of a recession is anything close to be totally reliable. In the end, even using these more widelyrecognized predictors of a recession as indicators, the fact is that even themost experienced and educated experts in the field can be 100% certain if arecession actually will occur.
In many cases, a stock market drop of a significant amount -of at least 10% of the overall value of the market - is considered by by manyto be one of the more reliable predictors of a recession. However, with that noted, about half of thedrops in the stock market of 10% or more since the end of the Second World Warhave not been followed by a recession.
Other experts tend to rely on a three month change upward inthe unemployment rate and the filing of initial jobless claims as one of themore reliable predictors of a . However, there are anumber of instances in which there have been some pretty significant increasesin the filing of jobless claims during a particular quarter since World War IIthat have not been followed by a recession.
In this day and age, many experts rely on the Index ofLeading Economic Indicators when it comes to predictors of a recession. This Index includes a number of differentfactors - including inflation, unemployment rates, consumer spending and soforth in order to make at least a basic determination pertaining to the stateof the economy as a whole.
Interestingly, when considering predictors of a recession,there even have been instances when a recession as identified as existing butthen ended nearly as quickly as it was announced. For example, in November of 2001, the NBER -the agency charges with officially declaring a recession - did in factaccurately announced that the nation was in the midst of a recession. However, the recession had officially endedby the conclusion of that very same month.
At the present time, some members of the NBER have suggestedthat if the announcement of a is going to be made anytime soon in the