Harvard economist Jeff Frankel posts an interesting graphic detailing the economy’s roller coaster ride since peaking in Dec 2007.
Index of Leading Economic Indicators leads the train, as it rose for a seventh consecutive month in October, followed by consumer confidence, which has hit some bumps throughout the ride, but still remains substantially higher than it was in February, Frankel says.
“The important middle cars, which represent measures of aggregate output, probably reached bottom in the early summer, and then started back up,” he adds.
To be sure, the unemployment measures lag the rest of the train, as they typically do.
From Frankel:
Among three key labor market measures, the hours worked series has apparently reached the bottom. Employment is still falling, though thankfully not at the very rapid pace of a year ago. The unemployment rate brings up the rear; people in that car are understandably unhappy.
So where does the economy stand now after its “terrifying freefall” of 4Q08 and 1Q09? “The train is probably at the bottom of the roller coaster valley,” says Frankel.
Certainly pay attention to Frankel’s commentary, especially since he sits on the National Bureau of Economic Research’s business cycle dating committee. Frankel has clearly stated in the past that he only speaks for himself on his blog, and not the committee. Still, his viewpoints could offer clues on when the trough for the recession will be dated.
Keep in mind that an official end-of-recession declaration isn’t expected until sometime in 2010 at the earliest. Northwestern University economist Robert Gordon, who also sits on the NBER committee, previously said that June 2009 will mark the end of the recession, but doesn’t expect an official proclamation anytime soon as the committee wants to make sure the economy doesn’t double-dip back into recession.
