Sunday, April 24, 2016

Population Growth as a Recession Indicator

Looking at "bottoms" in population growth: decrease, then bottom, then increase.

  •  A bottom in 1953Q2 falls just before the 1953 recession.
  •  A population-growth bottom comes just after the 1958 recession.
  •  A bottom at 1960Q3 falls just as the 1960 recession begins. Concurrent indicator.
  •  A bottom at 1969Q1 leads the 1970 recession.
  •  A bottom at 1974Q2, concurrent with the 1974 recession.
  •  No indication of the 1980 recession.
  •  A bottom at 1981Q4, concurrent.
  •  A bottom well before the 1990 recession; then very strong increase.
  •  A slowing and then speedup at 2000Q4, leading indicator.
  •  A bottom and then increase well before the 2008 recession.
  •  No present indication of recession.

Population growth changes are associated with nine of ten recessions shown on the graph. Of those nine changes, only one is a lagging indicator. Set that one aside as uninformative. Eight of ten recessions find leading or concurrent indicators in population growth. That's an 80% chance population growth gives some indication of recession. Don't ask me why.

The graph gives no indication of recession at present.

Surprise! At this writing (22 April 2016) FRED's "Total Population" series shows population growth thru the end of 2016.

I guess we're safe for a while :)

1 comment:

The Arthurian said...

My first graph here shows population increase just before recession.

This link would seem to indicate the opposite:
Economists urged to use fertility to predict recessions:
"New paper shows drop in conceptions is evident before economy starts to contract"