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.
Based on the economic and market data provided I don’t think a recession is around the corner. I believe this because I have analyzed the timing and depth of changes in the market and economic data relative to recessions in the charts. Firstly we see that during a recession housing prices drop rapidly we see this in 2008 when the housing market crashed. Housing prices are very high right now so if we use that as one of our indicators we are not in a recession. Second we see how volatility spikes in a recession. in 2008 it rose then fell then rose again and the final time it greatly increased there was a giant spike which took about 6 months to fully manifest but stayed around for quite a while at max volatility about a month and took about four months to drop back down to what some might call moderate levels. In 2020 we see a a sharp and steep increase very quickly and then it drops back down extremely quickly a little over a month. We however knew this was going to happen in reality there just was no choice covid measures had to be undertaken or at least the government thought. We see now a slight increase however I don’t believe we will see a sudden increase like we did in 2020 since the causes of that recession are pretty much faded away and the economy is recovering. The treasury yield spread shows a sharp increase in times of recession and right now it is decreasing which is a good sign. Consumer sentiment does give me some concern because we see it decreases in a recession and quite quickly. It is decreasing now however it doesn’t give me reason to believe a recession is headed our way. The same with price index the only difference being it rises in a recession and is on the rise now. It doesn’t worry me however as I believe peopel are frustrated and scared from the past couple years and consumers need more time o gain back all their confidence. Prices are still high. Unemployment rate gives me good signs. with unemployment we usually see a big change in about 1-5 months and it is a gradual increase. Right now the unemployment rate is looking very low compared to 2020 taking it’s steepest fastest drop in the data I am given. It is also not on the rise and when it begins to rise it will take some time to peak again. The 2020 peak seems to be a one time thing, considering the unemployment rate currently and the traditional trends on how long it takes to rise all signs are looking like it will stay at healthy levels for a while.