Guy NoirAugust 7, 2016 at 4:34 AMRW, I respect your work, however I am completely flummoxed by the cognitive dissonance in focusing on the results of manipulation in defining your boom and ignoring everything else pertaining to the real economy, which is generally in weak to awful shape. Could you do a post on something like why industrial production declines or corporate earnings declines should be disregarded?
Here's a rough snapshot of 2009. It was a completely different picture. Earnings were down across the board. This is what a recession looks like:
When you say the "real economy" is having trouble. I have no idea what you mean. People are working. What exactly is this measure the "real economy" ?
As for industrial production, the decline is also heavily weighted by the decline in the energy sector. The industrial production decline is completely correlated to the decline in oil prices. It is highlighting a sector change not a problem with the overall economy. It doesn't look anything like the collapse in 2009 during the recession.
Here's the major sector breakdown via the Federal Reserve. The only down category is mining, which is mostly the oil sector.
Bottom line, when you throw out dips in certain indicators and claim the economy is in trouble, you are not understanding what is behind the dips or their context.
The indicators that are the most direct indication of where we are in the boom-bust cycle, employment numbers and capital goodsprices (as measured by the stock market and real estate) all point to the fact that we are in the boom phase of the boom-bust business cycle.
There will always be movements within sectors that are contra to the general trend but sector dips are not what a recession is about.