Now let's look at the 1972-1985 period, which included three recessions -- the savage 16-month Oil Embargo recession of 1973-1975 and the double dip of 19-1982 (6-months and 16-months, respectively).
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions.
This committee statement is about as close as they get to identifying their method.
The data points show the cumulative percent change from a zero starting point for June 2009.
We now have the three indicator updates for the 61th month following the recession. Current Assessment and Outlook The overall picture of the US economy had been one of slow recovery from the Great Recession with a clearly documented contraction during the winter, as reflected in Q1 GDP.
Now let's examine the behavior of these indicators across time.
The first chart below graphs the period from 2000 to the present, thereby showing us the behavior of the four indicators before and after the two most recent recessions.
To achieve that goal, I've plotted the same data using a "percent off high" technique.
In other words, I show successive new highs as zero and the cumulative percent declines of months that aren't new highs.
The next update of the Big Four be the month-end Real Personal Income less Transfer Payments.
Background Analysis: The Big Four Indicators and Recessions The charts above don't show us the individual behavior of the Big Four leading up to the 2007 recession.
Rather than having four separate charts, I've created an overlay to help us evaluate the relative behavior of the indicators at the cycle peaks and troughs. Click for a larger image The chart above is an excellent starting point for evaluating the relevance of the four indicators in the context of two very different recessions.