Opinions about the U.S. recession earlier this year (e.g., the observer less than a month ago), CFNA Have the following needs:
The three-month moving average of the CFNAI fell below zero (ie, below trend growth) in May and June.This CFNAI Notes states that “after a period of economic expansion, an increase in the probability of a recession has historically been associated with CFNAI-MA3 values below –0.70.” CFNAI-MA3 does not cross this threshold.
As for the indications from the number of indicators falling or rising (i.e. the diffusion index), we have the following graph.
From the notes:
The CFNAI Diffusion Index represents the sum of the absolute values of the weights of the underlying indicators that contribute positively to the CFNAI in a given month minus the three-month moving average of the sum of the absolute values of the weights of those indicators that contribute positively to the CFNAI Contribution for the given month be negative or neutral. Historically, CFNAI Diffusion Index values have been higher than –0.35 during periods of economic expansion.
Therefore, I (still) don’t see a recession in the first half of 2022.