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Steven Hansen
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Steven Hansen is an international business and industrial consultant specializing in turning around troubled business units; consults to governments to optimize process flows; and provides economic indicator analysis based on unadjusted data and process limitations.
My company:
Econintersect LLC
My blog:
Global Economic Intersect
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  • Angel Martin
    , contributor
    Comments (1304) | Send Message
     
    i have gone back an forth on the ECRI recession call. They seemed to be right early in the year, but recent strength in employment and retail sales suggest not. ECRI use the NBER recession definition which is a persistent period of falling production, income, sales (manuf, wholesale and retail) and employment.

     

    ECRI's point is that everything except employment peaked in july and is now falling. http://bit.ly/qRZPQy#

     

    and ECRI argues that a significant fraction of past recessions had employment growing for several months into the recession (also true)

     

    If ECRI is correct, we should see a downside surprise on employment in the next few months.
    1 Dec 2012, 12:21 PM Reply Like
  • Steven Hansen
    , contributor
    Comments (2248) | Send Message
     
    Author’s reply » the bls data is the worst for getting it right in real time. they need at least 6 months, or a year and six months :) of course looking back at employment in the past recessions using historical data - what you are saying fits.

     

    a forecasting tool we use for forecasting employment is at the same levels (and downtrending) when the USA entered the great recession.
    1 Dec 2012, 09:24 PM Reply Like
  • dancing diva
    , contributor
    Comments (2538) | Send Message
     
    Steve, if we were in recession shouldn't the credit market be showing some stress?
    1 Dec 2012, 03:11 PM Reply Like
  • Steven Hansen
    , contributor
    Comments (2248) | Send Message
     
    Author’s reply » it will not be a credit driven crisis like 2007 / 8, but it will be a lower consumption event - driven in part because the great recessions debt imbalance has not cleared yet. at main street level (which is how our index is geared), it may not even be noticeable.

     

    in 4Q2012, there will be a significant headwind from inventory depletion - and my bet is there will be a slight reduction in consumption based on trend lines. this would be more than enough to put the USA in a technical recession.
    1 Dec 2012, 09:11 PM Reply Like
  • bbro
    , contributor
    Comments (9597) | Send Message
     
    "the relationship between the year-over-year growth rate of non-farm private employment and the year-over-year real growth rate of retail sales. As long as retail sales grows faster than the rate of employment gains (above zero on the below graph) – a recession is not imminent."

     

    It appears this relationship can be negative for a long time and a recession still doesn't materialize...what do you use additionally to give this indicator a supporting confirmation?
    2 Dec 2012, 01:15 AM Reply Like
  • Steven Hansen
    , contributor
    Comments (2248) | Send Message
     
    Author’s reply » i am not a person who takes a single metric and runs with it. even a metric which historically been 100% accurate fails because of a specific set of conditions with manifest. as an example, our economic forecast uses a weighted set of approximately 10 metrics which we believe are accurate in real time. off the top of my head, i believe two of the 10 metrics were in contraction.

     

    i am not a lover of using monetary metrics (as you know) - so obviously i am not using this for any of my forecasting. i would use this as a secondary or confirming metric to what the other metrics are saying. i tend to lean heaviest on transport metrics, followed by import metrics. i would love to rely on certain employment metrics but i do not trust them in real time.
    2 Dec 2012, 09:40 AM Reply Like
  • bbro
    , contributor
    Comments (9597) | Send Message
     
    Thank you..as an aside I have incorporated one of your metrics in my set of indicators to follow..the truck transportation employment number....
    2 Dec 2012, 09:50 AM Reply Like
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