Category Archives: NYT

When the economic data can’t get any better than it is then it is time to shore up your finances.  One way to generalize about the economic conditions is to take a look at the New York Times Recession/Depression Index.

What is the New York Times Recession/Depression Index?  It is the number of references to either a recession or a depression.  In our modern era, the terms “panic” and “depression” are no longer an acceptable part of the general lexicon to denote a decline in economic activity.  However, in the late 18th and early 19th century, they told it like it was.   in the mid- to late 20th century, the word “recession” replaced the word panic or depression.

In order to tackle the data, we need a reference point.  The best starting point is the National Bureau of Economic Research’s (NBER) indication of when a recession begins (peak) and ends (trough).  Below are the designations of both periods from 1854 to 2009.

With the established data on what was considered by the National Bureau of Economic Research as a recession (peak to trough) and expansion (trough to peak), we now have a basis for the quality, or lack thereof, in the New York Times Recession/Depression Reference Index.

The Index

Below is a charting of the data on references made by the New York Times to the words “recession” and “depression.”

Does the Data Match?

For the purposes of clarity, we’ve highlighted the peaks in references to the words “depression” and “recession.”  Do any of those peaks happen to match up with the NBER definitions of a period of economic contractions?  From what we can tell, there is a 100% coincidence between the peak in the references and either being in a recession/depression or at the beginning of such a period.

2005 to 2018

When looking at the last full cycle, from March 2006 to December 2018, we can see the peak in references to “recessions” which occurred in the month of March 2009.

For the Dow Jones Industrial Average, the period from January 2005 has a clear inverse relationship to the New York Times Recession/Depression Index in the same period of time.

At the current level in the New York Times Recession/Depression Index, would anyone be surprised if a recession were to emerge in 2019?  We wouldn’t be surprised.

Our August 2009 call that the recession was over.