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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?

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U.S. Markets: Resilience and Reacceleration

Anatomy of a Recession Quarterly Webcast, Recorded October 13, 2021

Jeffrey Schulze, CFA Director, Investment Strategist ClearBridge Investments

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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

Oct 31, 2021Sept 30, 2021June 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 October 31, 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

Current20202007-200920011990-19911981-198219801973-19751969-1970

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 October 31, 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 2018Q4 2018Q2 2019Q4 2019Q2 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 Presentation

Anatomy of a Recession Presentation

View the latest comprehensive slide deck.

Anatomy of a Recession Presentation - Short Version

Anatomy of a Recession Presentation – Short Version

Take a look at the latest abridged Economic and Market Outlook slide deck.

Insights