Real-Time Real Economic Activity: Exiting the Great Recession and Entering the Pandemic Recession
25 Pages Posted: 1 Jul 2020
Date Written: June 26, 2020
We study the real-time signals provided by the Aruoba-Diebold-Scotti Index of Business conditions (ADS) for tracking economic activity at high frequency. We start with exit from the Great Recession, comparing the evolution of real-time vintage beliefs to a “ﬁnal” late-vintage chronology. We then consider entry into the Pandemic Recession, again tracking the evolution of real-time vintage beliefs. ADS swings widely as its underlying economic indicators swing widely, but the emerging ADS path as of this writing (late June) indicates a return to growth in May. The trajectory of the nascent recovery, however, is highly uncertain – particularly as COVID-19 spreads in the South and West – and could be revised or eliminated as new data arrive.
Keywords: Aruboba-Dieold-Scotti index, ADS index, nowcasting, business cycle, recession, expansion, coincident indicator, real economic activity, forecasting, Big Data
JEL Classification: E32, E66
Suggested Citation: Suggested Citation