Recession Model Update (December 2020)

Friends,

As anticipated in last month’s update, model values have continued to fall.

Current Values (as of December 7, 2020)

With the recovery seemingly underway, the possibility of a double-dip recession now seems to be brought up in more and more articles. To be honest, I wouldn’t be surprised if journalists like to discuss the possibility of a double-dip recession in the aftermath of every recession, regardless of the specific circumstances surrounding each one.

So what does this model say about double-dips?

Historically, once model values begin falling post-recession, they tend to keep falling without any upticks. The one exception to this pattern was the double-dip recession in the early 1980s: model values began falling, then experienced a few upticks before spiking again for the double-dip.

This seems to suggest that if model values begin ticking up - even if only a little bit - then a double-dip recession may have a higher likelihood of occurring, at least according to this model.

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Until Next Time

Terrence | terrencez.com

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