Editor's note: This article was originally published on January 20, 2019, by Menzie Chinn here.
I focus on the series highlighted by the NBER's business cycle dating committee (BCDC).
All last-reported observations of these indicators are rising, save perhaps real manufacturing and trade sales (October). Note, we are in January, and we have personal income only through November, and monthly GDP through October. We have no readings of these series later than December (employment, industrial production).
So, best guess (I won't pull an Ed Lazear and be more definitive) is no recession in December 2018. What about in a year? Well, here's the 10 year-2 year spread, and economic policy uncertainty (EPU) as measured by Baker, Bloom and Davis.
A standard probit model using the 10 year-3 month spread laggged a year says the probability of being in a recessionary month in December 2019 is 27%. As discussed in this post, augmenting with measured policy uncertainty yields a higher probability.
Addendum: From Goldman Sachs today:
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.