Recession Indicators

 

When economists see that short-term bonds are making higher yields than long-term bonds (called an “inverted yield curve” that can be seen when comparing two- and 10-year Treasury bonds on a graph), many predict an impending recession. Yield curve inversions signal a loss of investor confidence in the economy’s long-term health and have preceded every US recession since 1956.

Economists at NBER use a more complicated rubric to define a recession. The organization looks at six economic indicators: nonfarm payrolls, industrial production, personal income, employment, personal consumption, and manufacturing sales.

People also attempt to define recessions in more creative ways. The “men’s underwear index” states that sales of men’s underwear fall during recessions, and the “lipstick index” says people skip big purchases for small luxuries like lipstick.

Social media users identified something they called a “vibecession” in the early 2020s, citing the comeback of high-energy “recession pop” music and the prevalence of “recession blondes” who opt for lower-maintenance hairstyles. 

Ultimately, many recessions are called retroactive.

Business owners can use the free online calculator to boost their bottomline during good times or bad!!