Real-Time Real Economic Activity: Exiting the Great Recession and Entering the Pandemic Recession
We study the real-time signals provided by the Aruoba-Diebold-Scotti Index of Business conditions (ADS) for tracking economic activity at high frequency. We start with exit from the Great Recession, comparing the evolution of real-time vintage beliefs to a "final" late-vintage chronology. We then consider entry into the Pandemic Recession, again tracking the evolution of real-time vintage beliefs. ADS swings widely as its underlying economic indicators swing widely, but the emerging ADS path as of this writing (late June) indicates a return to growth in May. The trajectory of the nascent recovery, however, is highly uncertain (particularly as COVID-19 spreads in the South and West) and could be revised or eliminated as new data arrive.
For helpful discussion I thank Boragan Aruoba, Glenn Rudebusch, Chiara Scotti, Minchul Shin, Keith Sill, and Tom Stark. For outstanding research assistance and related discussion I thank Philippe Goulet Coulombe, Tony Liu, and Boyan Zhang. The usual disclaimer applies. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.