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.
I would say with some confidence that a recession is around the corner because the Consumer Segment Index has been decreasing for months now, which has been the case before the other recessions that we can see in the charts. Consumer price index has also been increasing in the last few months, and before some of the greatest recession on these charts, we can see that the consumer price index was always increasing before the recession started. There has not been a lot of times where the consumer price index has been increasing for many months and there was no recession. Another factor is the unemployment rate. Since the we opened up the world after Covid-19, the unemployment rate has decreased drastically. However, this decrease is now starting to stagnate, and the unemployment rates are not really decreasing a lot anymore. This has also been the case ahead of previous recessions, where unemployment rates have stopped decreasing and started to increase right before the recession started.
If we look at the market indicators, I would say that it is harder to prove that a recession is around the corner. However, one major takeaway I got from these charts is the Treasury Yield Spread between the 10 year note and the 3 month bill. In this chart we can see that after every major decrease, there has been a recession. In the last months we can see a pretty significant decrease, which might indicate that we should start preparing for a recession to come around.
The only thing I would say that is completely against a recession is the fact that we had a little recession only a couple years ago, which makes it less likely for there to be another recession anytime soon. After every other recession on these charts, there is a long time-period before the next recession. However, I would not be completely relaxed, because a recession might be on its way.