How many months after industrial production peaks before a recession hits?
|Industrial production is one of the items the NBER uses to date recessions. How much lead time does it give?
Industrial production data from the Fed, chart by Mish
Other than 2000 and 2020 there is not much lead time between the time industrial production peaks and recession starts.
Recession lead time after industrial production peak
Industrial production data from the Fed, calculation and chart Mish
In 5 of the last recessions, industrial production was primarily a coincident indicator of recessions. In 1990 IP peaked one month after recession started and in 1980 IP peaked at the start of the recession.
Twice the lead time was a month and twice it was two months.
The two main exceptions are 2001 and 2020 where IP was in a long slowdown before recession hit.
Currently, IP hit a peak in September and manufacturing in October. The chart is through October.
Most likely recession will hit without a warning from industrial production.
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