Or, the second part “So you think we’ve been in a recession since early August”…
figure 1: Lewis-Mertens-Stock Weekly Economic Index (blue), OECD Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims US Weekly Economic Conditions Index (green).Source: NY Fed via Fred, OECD, Wisio.
If the reading of 3.2 persists for the entire quarter, then the WEI reading of 3.2 for the week ended 8/6 could be interpreted as a quarterly growth rate of 3.2%. The OECD’s weekly tracking reading of 1.9 translates into an annual growth rate of 1.9% for the year ended 6 August. Baumeister et al.The 2.1% reading for the week ended June 25 was interpreted as a 2.1% increase Exceeds long-term trend growth rate. The average growth rate of US GDP from 2000-19 was about 2%.
figure 2: Lewis-Mertens-Stock Weekly Economic Index (blue), OECD Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims US Weekly Economic Conditions Index plus 2% trend (green).Source: NY Fed via Fred, OECD, Wisioand the authors’ calculations.
In summary, WEI (10 components) shows continued strong growth through 8/6. The OECD Weekly Tracker, based on Google Trends and machine learning, shows a slowdown (but no negative readings) in May-July 2022. Baumeister et al.WECI after adding trends (based on 25 indicators) shows a similar pattern to WEI (see appendix for comparison Baumeister et al.)
How these series explain developments during the last recession (unadjusted WECI shown below).
image 3: Lewis-Mertens-Stock Weekly Economic Index (blue), OECD Weekly Tracker (tan), Baumeister-Leiva-Leon-Sims US Weekly Economic Conditions Index (green). Recession dates as defined by NBER are shaded in gray.Source: NY Fed via Fred, OECD, Wisiothe National Bureau of Economic Research.
The above suggests that the US was not in contractionary territory as of August 6, as summarized by various underlying macro indicators.
