Predicting the trough and a jobless recovery

From Econbrowser:

Michael Dueker is a senior portfolio strategist at Russell Investments and formerly was an assistant vice president in the Research Department at the Federal Reserve Bank of St. Louis. Michael is also a member of the Blue Chip forecasting panel. In early February 2008, Michael submitted a piece to Econbrowser that correctly predicted the onset of the current recession, using a model-based forecast. We are pleased that that he is now presenting forecasts from the same Qual VAR model concerning the recession's trough date and the magnitude of a jobless recovery to follow, subject to the disclaimer that the content is the responsibility of the author and does not represent official positions of Russell Investments and does not constitute investment advice.

Current business cycle forecasts see a July or August 2009 trough and a jobless recovery until March 2010

by Michael Dueker

In analyzing the current recession, it is useful to be able to predict the trough date and its depth and to compare it with previous recessions. To do so, I use the Qual VAR model (or this link) because it is designed to identify and characterize recessions in real time, based on the incoming macroeconomic data, as well as forecast future business cycle developments. The announcement from the National Bureau of Economic Research on December 1, 2008, of a cyclical peak in December 2007 meant that the recession onset date I forecast earlier was realized, despite the fact that the current recession did not begin with at least two consecutive quarters of negative GDP growth (at least not in the GDP data available to date)....MUCH MORE