When the economic data can’t get any better than it is then it is time to shore up your finances. One way to generalize about the economic conditions is to take a look at the New York Times Recession/Depression Index.
What is the New York Times Recession/Depression Index? It is the number of references to either a recession or a depression. In our modern era, the terms “panic” and “depression” are no longer an acceptable part of the general lexicon to denote a decline in economic activity. However, in the late 18th and early 19th century, they told it like it was. in the mid- to late 20th century, the word “recession” replaced the word panic or depression.
In order to tackle the data, we need a reference point. The best starting point is the National Bureau of Economic Research’s (NBER) indication of when a recession begins (peak) and ends (trough). Below are the designations of both periods from 1854 to 2009.
| Peak | Trough |
| December 1854 (IV) | |
| June 1857(II) | December 1858 (IV) |
| October 1860(III) | June 1861 (III) |
| April 1865(I) | December 1867 (I) |
| June 1869(II) | December 1870 (IV) |
| October 1873(III) | March 1879 (I) |
| March 1882(I) | May 1885 (II) |
| March 1887(II) | April 1888 (I) |
| July 1890(III) | May 1891 (II) |
| January 1893(I) | June 1894 (II) |
| December 1895(IV) | June 1897 (II) |
| June 1899(III) | December 1900 (IV) |
| September 1902(IV) | August 1904 (III) |
| May 1907(II) | June 1908 (II) |
| January 1910(I) | January 1912 (IV) |
| January 1913(I) | December 1914 (IV) |
| August 1918(III) | March 1919 (I) |
| January 1920(I) | July 1921 (III) |
| May 1923(II) | July 1924 (III) |
| October 1926(III) | November 1927 (IV) |
| August 1929(III) | March 1933 (I) |
| May 1937(II) | June 1938 (II) |
| February 1945(I) | October 1945 (IV) |
| November 1948(IV) | October 1949 (IV) |
| July 1953(II) | May 1954 (II) |
| August 1957(III) | April 1958 (II) |
| April 1960(II) | February 1961 (I) |
| December 1969(IV) | November 1970 (IV) |
| November 1973(IV) | March 1975 (I) |
| January 1980(I) | July 1980 (III) |
| July 1981(III) | November 1982 (IV) |
| July 1990(III) | March 1991(I) |
| March 2001(I) | November 2001 (IV) |
| December 2007 (IV) | June 2009 (II) |
With the established data on what was considered by the National Bureau of Economic Research as a recession (peak to trough) and expansion (trough to peak), we now have a basis for the quality, or lack thereof, in the New York Times Recession/Depression Reference Index.
The Index
Below is a charting of the data on references made by the New York Times to the words “recession” and “depression.”
Does the Data Match?
For the purposes of clarity, we’ve highlighted the peaks in references to the words “depression” and “recession.” Do any of those peaks happen to match up with the NBER definitions of a period of economic contractions? From what we can tell, there is a 100% coincidence between the peak in the references and either being in a recession/depression or at the beginning of such a period.
2005 to 2018
When looking at the last full cycle, from March 2006 to December 2018, we can see the peak in references to “recessions” which occurred in the month of March 2009.
For the Dow Jones Industrial Average, the period from January 2005 has a clear inverse relationship to the New York Times Recession/Depression Index in the same period of time.
At the current level in the New York Times Recession/Depression Index, would anyone be surprised if a recession were to emerge in 2019? We wouldn’t be surprised.