Resolves YES if the NBER Business Cycle Dating Committee declares, by the end of 2025, US Eastern Time, that the US entered a recession at any point in 2023 or 2024. Resolves NO on 2026-01-01 otherwise.
For a derivative market that resolves sooner, based on how this market is priced at the end of 2024, see:
/chrisjbillington/will-manifold-price-a-2024-us-reces
Update 2025-16-01 (PST): - Market now resolves NO at the end of 2025 if no recession is retrospectively declared before then. (AI summary of creator comment)
1,000
3.00@hidetzugu Market resolves NO at end of 2025 if no recession is retrospectively declared before then.
Have updated the title to make this more obvious, now that 2024 is over.
@hidetzugu The 2008 recession was announced 12 months after the backdated start, and the 2001 recession with a 8 month delay, which is why people keep holding shares here.
@benjaminIkuta copied from one of my markets:
NBER determines whether recessions occurred and their dates retrospectively: "We wait until sufficient data are available to avoid the need for major revisions." So official recession determinations are typically made long after the recession actually occurred because it takes time for the data analysis. For example, the April 2020 recession was announced in July 2021. See https://www.nber.org/research/business-cycle-dating/business-cycle-dating-committee-announcements for historical data on NBER's previous determinations.
@benjaminIkuta https://www.bea.gov/news/blog/2013-07-08/revising-economic-indicators-heres-why-numbers-can-change
When we revise a major economic indicator, itโs not unusual for some to ask us, โWhy didnโt you get it right the first time?โ
Itโs not that the earlier estimate was wrong. Rather, itโs the result of a delicate balancing act BEA performs to simultaneously achieve the two most important qualities of its estimatesโaccuracy and timeliness.
The public wants accurate data and wants it as soon as possible. To meet that need, BEA publishes early estimates that are based on partial data. Even though these data arenโt complete, they do provide an accurate general picture of economic activity. They capture the direction and trends of various components of the economy, providing valuable information that businesses and government leaders depend on and react to. They provide an โearly readโ on whatโs happening in the economy.
<...>
When BEA calculates the advance estimate, we donโt yet have complete source data, with the largest gaps in data for the third month of the quarter. In particular, the advance estimate lacks complete source data on inventories, trade, and consumer spending on services. Therefore, we must make assumptions for these missing pieces based in part on past trends. As part of this process, we publish a detailed technical note that lays out the assumptions we made for a particular estimate. We also publish detailed materials on the standardized procedures and methods used in the various vintages of the GDP estimates.
As new and more complete data become available, we incorporate that information into the second and third GDP estimates. About 45 percent of the advance estimate is based on initial or early estimates from various monthly and quarterly surveys that are subject to revision for various reasons, including late respondents that are eventually incorporated into the survey results. Another roughly 14 percent of the advance estimate is based on historical trends.
This doesn't explain why it took a year to declare a recession that was not particularly borderline - I don't really have an answer to that other than that they probably want to be conservative and take their time, and the declaration of recession doesn't really matter for doing anything about the economy, it only matters for studying the economy historically (it's a backwards-looking indicator, not a forwards-looking one).
It makes more sense for a borderline one, something that looks more like the 2022 case - from a data revision two years later, it turns out that the revised economic data says we only had one quarter of negative GDP growth after all, not two (although that isn't the actual definition of recession, it shows an example of what a borderline recession might look like). https://www.axios.com/2024/09/26/2022-recession-gdp-revision
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https://fred.stlouisfed.org/series/T10Y3M
10Y-3M about to "uninverse"? Does it have a significantly better "predictive" power than 10Y-2Y @Peregrine?
Edit: Sorry commented on the wrong market
Fun chart: https://x.com/bravosresearch/status/1848047330794385494
(even if true, it might still take months)
1 - Soft landings are recession avoidance measures. There wouldn't be articles about "soft landings" unless the economy already looked like it was heading towards a recession.
2 - Notice all the smaller spikes and the +1y delay between the late 2006 spike and the 2008 recession. The fed has had varying success with soft landings.
3 - News is not a pure signal. We don't know if external forces like subscriptions rates or politics were driving mentions of "soft landings" and "recessions".
Similar Polymarket Q is at 6%. This suggests that this market thinks there is a ~15% chance that a recession will start in Q4?
https://polymarket.com/event/us-recession-in-2024-1
@nic_kup The polymarket question resolves based on two consecutive quarters of negative GDP growth rather than depending on the NBER committee call. Another difference is this market allows for the recession to start in 2024, rather having both Q3 and Q4 fall under some criteria.
@PlainBG For the second point: that is what I mean by saying this market believes there is a ~15% chance that a recession will start in Q4 (which i think is too high)
@nic_kup it's 3% if you compare the markets on GDP criteria. The rest of the difference is from the NBER criteria
@nic_kup Nice and vague: The committee's view is that while each of the three criteriaโdepth, diffusion, and durationโneeds to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another.
Has the Recession Started? by Emmanuel Saez and Pascal Michaillat.
"With August 2024 data, our indicator is at 0.54pp, so the probability that the US economy is now in recession is 48%. In fact, the recession may have started as early as April 2024."
See also this modified indicator of the modified indicator: https://www.zerohedge.com/economics/key-recession-indicator-gives-stronger-recession-signal-august
I guess you can always tweak the data and build a new indicator concluding whatever you want, but Saez and Michaillat are serious economists and not Zero Hedge permabears so...
Sahm rule: 0.57 with the today' job report ( https://fred.stlouisfed.org/series/SAHMREALTIME ).
@CryptoNeoLiberalist Sounds like policy wise youโre advocating for a hands off approach to the situation after spending too much money on porn.