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U.S. Economy: Anatomy of a Recession
Where do we stand - and what should we watch for in the coming months?
Anatomy of a Recession: Q3 Update Webcast
Recorded July 14, 2021
Jeff Schulze, Investment Strategist from ClearBridge Investments
U.S. Economy: Stay in Front of the Business Cycle
The Anatomy of a Recession (AOR) program is designed to help you stay on top of the business cycle and provide thoughtful insights through our exclusive risk and recovery dashboards. Updated monthly, AOR offers a concise, practical look at what the key indicators are saying about the United States economy and the potential impact on the equity markets from ClearBridge Investments. The data suggests that the economy exited the COVID-19 recession around mid-year 2020. As we move into 2021, investor focus has shifted to the possibility of a double dip recession which is why ClearBridge has re-introduced the Recession Risk dashboard. Click on each tab for a different view of the dashboard data.
U.S. Recession Risk Indicators
| June 30, 2021 | May 31, 2021 | April 30, 2021 | ||
|---|---|---|---|---|
Consumer |
Housing Permits | |||
| Job Sentiment | ||||
| Jobless Claims | ||||
| Retail Sales | ||||
| Wage Growth | ||||
Business Activity |
Commodities | |||
| ISM New Orders | ||||
| Profit Margins | ||||
| Truck Shipments | ||||
Financial |
Credit Spreads | |||
| Money Supply | ||||
| Yield Curve | ||||
| Overall Signal |
Expansion
Caution
Recession
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.
Data as of June 30, 2021
Source: ClearBridge Investments, BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg. The ClearBridge Recession Risk Dashboard was created in January 2016. References to the signals it would have sent in the years prior to January 2016 are based on how the underlying data was reflected in the component indicators at the time.
U.S. Recession Risk Indicators
| Current | 2020 | 2007-2009 | 2001 | 1990-1991 | 1981-1982 | 1980 | 1973-1975 | 1969-1970 | ||
|---|---|---|---|---|---|---|---|---|---|---|
Confidence |
Housing Permits | |||||||||
| Job Sentiment | ||||||||||
| Jobless Claims | ||||||||||
| Retail Sales | ||||||||||
| Wage Growth | ||||||||||
Economic |
Commodities | |||||||||
| ISM New Orders | ||||||||||
| Profit Margins | ||||||||||
| Truck Shipments | n/a | n/a | ||||||||
Financial |
Credit Spreads | |||||||||
| Money Supply | ||||||||||
| Yield Curve | ||||||||||
| Overall |
Expansion
Caution
Recession
Data as of June 30, 2021
Source: FactSet, Bloomberg, Conference Board, Census Bureau, Federal Reserve, FRBPA, Chicago Fed, ISM, Dept. of Labor, Bloomberg/Barclays, AAII, Investors Intelligence, and Moody’s.
U.S. Recovery Case Dashboard
| Q2 2018 | Q4 2018 | Q2 2019 | Q4 2019 | Q2 2020 | ||
|---|---|---|---|---|---|---|
Consumer |
Housing Permits | |||||
| Job Sentiment | ||||||
| Jobless Claims | ||||||
| Retail Sales | ||||||
| Wage Growth | ||||||
Business Activity |
Commodities | |||||
| ISM New Orders | ||||||
| Profit Margins | ||||||
| Truck Shipments | ||||||
Financial |
Credit Spreads | |||||
| Money Supply | ||||||
| Yield Curve |
Source: BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg. The ClearBridge Recession Risk Dashboard was created in January 2016. References to the signals it would have sent in the years prior to January 2016 are based on how the underlying data was reflected in the component indicators at the time.
Resources
Anatomy of a Recession Brochure
Stay On Top Of The Business Cycle
Anatomy of a Recession Presentation
View the latest comprehensive slide deck.
Anatomy of a Recession Presentation – Short Version
Take a look at the latest abridged Economic and Market Outlook slide deck.
