I have previously shown that based on the past five business cycles, the next recession might not start until March 2019. I examined the Index of Coincident Economic Indicators (CEI) for some historical guidance on the longevity of economic expansions. Let’s update our analysis.
It has taken 68 months–from January 2008 through October 2013–for the CEI to fully recover from its severe decline during 2008 and early 2009. The previous five recovery periods averaged 26 months within a range of 19-33 months. The good news is that the average increase in the CEI following each of those recovery periods through the next peak was 18.6%, over an average period of 65 months within a range of 30-104 months. If we apply this average to the current cycle, then the CEI would peak in 45 more months, during March 2019, with a substantial gain from here.
Dispatches From The Front 