Real-Time Real Economic Activity: Exiting the Great Recession and Entering the Pandemic Recession

25 Pages Posted: 1 Jul 2020

See all articles by Francis X. Diebold

Francis X. Diebold

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 26, 2020

Abstract

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

Diebold, Francis X., Real-Time Real Economic Activity: Exiting the Great Recession and Entering the Pandemic Recession (June 26, 2020). PIER Working Paper No. 20-023, Available at SSRN: https://ssrn.com/abstract=3638240 or http://dx.doi.org/10.2139/ssrn.3638240

Francis X. Diebold (Contact Author)

University of Pennsylvania - Department of Economics ( email )

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