Recession Predictors: An Evaluation

Abstract: In the first half of 2022, real GDP has declined in each quarter, but the unemployment rate has remained at historically low levels. Since past recessions have been associated with a sharp increase of the unemployment rate, we are unlikely to be in a recession, but the consecutive GDP declines could suggest that a recession is imminent. This Economic Brief reviews the evidence on yield spreads, which past research has shown to be useful recession predictors. Current readings of these indicators do not yet suggest that the onset of a recession within the next year is very likely.

Keywords: GDP; recession; yeild spreads; economic indicators; inflation;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2022-08

Volume: 22

Issue: 30