Make your argument based on your analysis of the given charts. Discuss timing and depth of changes in the economic data relative to recessions in at least 50 words.
One piece of economic data that is relative to recessions is composite home price index. This piece of data is a leading indicator, therefore the home price index goes down before the recession starts. During the recession in 2008 this can be seen because the home price index can be seen starting too drop around 2005 and kept dropping until the recession was nearly over. The reason this drop occurs is due to the housing market starting to crash because houses aren’t selling at such high prices. I believe the same thing will happen soon since the depth of the home price index is 4.3 percent changes higher than right before the housing market crashed in 2008 reflecting that the housing market must be about to drop and a recession is in our future. Another piece of evidence that a recession is near is the data on consumer sentiment index. During the 2008 recession you see a trend of consumer sentiment index declining before the recession occurs. In 2008 you see consumer sentiment index go from 6.7 in 2007 to a low of -19.1 in 2008. This volatile drop in consumer sentiment can be seen as a clear example of when a recession is about to start. This is important when looking at the 2022 economic data since consumer sentiment dropped from 23 in 2021 to a very low current day -36.6. I believe these volatile drops in consumer sentiment result in recession which means that between this and the data on composite home price index there will be a recession in the near future.