- The Covid triggered recession probably ended in October 2020 according to two reliable recession indicator models.
- Analyzing the series data of both the Conference Board’s Leading Economic Index and the American Chemistry Council’s Chemical Activity Barometer results this conclusion.
- The National Bureau of Economic Research Business Cycle Dating Committee has yet to announce the end of the recession.
The start of the 2020 recession was reported on March 22, 2020 when we announced that the anticipated March 2020 Unemployment Rate would signal the start of a recession.
Then, on April 2, 2020 the iM-Business Cycle Index also signaled a recession warning.
Finally on June 8, 2020 the National Bureau of Economic Research Business Cycle Dating Committee confirmed that the 128-month expansion ended sometime in February 2020.
End of Recession Indicators
We follow the monthly data from two leading economic indexes to construct two reliable recession indicator models.
- The six-month smoothed compound annualized growth rate of the Conference Board’s Leading Economic Index (CB-LEIg), Figure-1.
- The six-month smoothed compound annualized growth rate of the American Chemistry Council’s Chemical Activity Barometer (CABg), Figure-2.
Both models signaled simultaneously that the contraction phase of the business cycle ended in October 2020, when the growth rate of the indexes changed from negative to positive.
Both models correctly indicated the start of the last eight recessions since 1969, and the end of the previous seven recessions. It is unlikely that the current end of recession indication is incorrect.
Recent economic commentaries
It is noteworthy that the most recent commentary from both index providers indicates that the U.S. economy is expanding again.
The U.S. LEI continued rising in February, suggesting economic growth should continue well into this year. ………… The Conference Board now expects the pace of growth to improve even further this year, with the U.S. economy expanding by 5.5 percent in 2021.
American Chemistry Council:
With ten months of gains, the latest CAB reading is consistent with expansion in the U.S. economy.