Sunday, September 11, 2016

Putting numbers on vigor (3.75: A look at the last time)

A little worried now about vigor. I've been shouting "vigor" since March. This is September. I didn't expect vigor by now, no. But I got worried when I looked at the two trend lines on yesterday's graph. It looks like things are getting slower. Less vigorous.

Yeah, maybe I was expecting vigor by now, yesterday. What was I thinking??

So I thought I'd take a look at what happened in the 1990s when there was a similar "bowl shape" in the household debt service data.

This is Household Debt Service (TDSP at FRED) from 1990 thru 1996:

Graph #1: The Bowl-Shape in Household Debt Service, 1991-1995
I colored in one side of the bowl red and the other side green. So you can see the bowl, and so you can see the parts of it I'm looking at.

Now I'll take the red part and the green part and put trend lines on them. I'm making the trendline for the red line dashed-red and the one for the green line dashed-green. Both are second order polynomial trend lines, which make a nice bowl shape.

Graph #2: Trend Lines Added
Right away, I relaxed a little bit. There is a delay of several months between the dashed red and green lines on the right side. More than on the left side. If I was doing this in late 1993, I'd be saying But the line is supposed to be going up now, looks like it isn't going up! And I'd have been all worried for nothing.

So I'm not gonna worry about our bowl. We should start seeing it pretty soon, the right side curving up. If it doesn't come today I don't have to lose any sleep over it.

// the Excel file

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