Real-Time Real Economic Activity: Exiting the Great Recession and Entering the Pandemic Recession

Francis X. Diebold

NBER Working Paper No. 27482
Issued in July 2020
NBER Program(s):Asset Pricing, Economic Fluctuations and Growth, International Finance and Macroeconomics

We study the real-time signals provided by the Aruoba-Diebold-Scotti Index of Business conditions (ADS) for tracking economic activity at high frequency. We start with exit from the Great Recession, comparing the evolution of real-time vintage beliefs to a "final" late-vintage chronology. We then consider entry into the Pandemic Recession, again tracking the evolution of real-time vintage beliefs. ADS swings widely as its underlying economic indicators swing widely, but the emerging ADS path as of this writing (late June) indicates a return to growth in May. The trajectory of the nascent recovery, however, is highly uncertain (particularly as COVID-19 spreads in the South and West) and could be revised or eliminated as new data arrive.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w27482