There is little evidence that the USA is in recession – except in the goods producing sectors and business sales which are marginally in a decline. Even in the contracting goods producing sectors, the recession evidence is far from overwhelming.

What triggered this post is continued unwavering assertions by some that the USA is NOT in a recession.  Understanding the data, historical movements and data gathering/methodologies – the wise pundit would not assert anything with conviction at this time.

Looking at manufacturing’s historical movements, manufacturing can be growing, flat or declining going into a recession.One cannot simply use goods production as a single litmus test of a recession.

And this is not to mention that goods production data is revised for six months up to YEARS after the initial data release.

There is no way for ANYBODY to use most data sources with any confidence in real time. Data collection systems remain in the 20th century – even though real time systems have been possible for almost 20 years – with the USA continuing to use sampling, extrapolation, voodoo seasonality adjustments, and wild guesses in data building until long after the original release date. 

This week personal income data was released for December. As a side note, personal income is one of the four elements used to mark recessions.  Here, personal income looks strong – but depending on what causes a recession – even personal income growth rate may be accelerating going into a recession. 

I remember arguing with many on Seeking Alpha in 2008 that the USA was in a recession. Overwhelmingly, the data junkies and pundits insisted that there was no recession. It took one year AFTER the recession began for an admission there was a recession. This was the Great Recession and arguably the second worst recession in USA history, certainly in the last 100 years.If that super recession was so difficult to identify in real time, why would anyone argue with conviction that the USA was NOT in a recession now?

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