What is the U.S. Economy probability of recession? Currently = zero.
In this dashboard I show three different ways to measure it:
1) Yield curve: we can see that the 10-years-3-month spread has been a good predictor in advance. However we must be cautious of false alarms.
2) Smoothed probabilities (orange line): this indicator developed by Chauvet and Piger (2008) based on the four coincident variables: industrial production, non-farm payroll employment, manufacture and trade sales, and real personal income excluding transfers.
3) Google searchers: I used a combination of several Google searches including: jobs, unemployment welfare, bankruptcy, real estate listing, industrial machinery, coupons, apparel among other. The methodology uses principal components as independent variables.
Based on the most recent data available, I am forecasting 3.5% of economic growth and 3.6% of inflation in 2019.