Are We in a Recession?
Official GDP is quarterly, revised twice, and arrives months late. GDPv2 combines that data with what people actually spend, defer, and feel — weighted toward inputs that update daily or monthly, not quarterly. The result is a more complete, more real-time read on the economy.
Official data looks acceptable. Consumer-facing indicators are showing real strain. The full GDPv2 picture is harder than the headline suggests.
What GDP Measures — and What It Misses
GDP measures output. It doesn't measure whether that output translates into anything people actually feel. It treats a dollar of government deficit spending the same as a dollar of consumer wages. It can print positive while real wages erode, sentiment collapses, and households max out credit cards. The number gets revised for years — the final figure for any given quarter can arrive 18 months after the fact. By the time GDP confirms a recession, the NBER is usually dating it six months earlier.
Why GDPv2 Is More Real-Time
Official GDP is quarterly. GDPv2 recalculates whenever fresh data arrives — which is continuously. The S&P 500 updates daily. Temp staffing, consumer sentiment, and the Cardboard Box Index update monthly. These aren't survey estimates subject to two rounds of revision: they're transaction records and physical measurements. When a manufacturer cuts box orders, that shows up in production data before it shows up anywhere in GDP. When households stop paying their credit cards, that's a hard transaction record — not a model estimate. GDPv2 gives those inputs 60% of the weight precisely because they arrive faster and are harder to revise away.
How the GDPv2 Score Is Built
The score is a weighted composite: 40% official indicators (unemployment, S&P 500, temp staffing), 60% alternative ground-truth data (consumer sentiment, credit card delinquency, cardboard box production, Big Mac Index, Men's Underwear Index). The 0–100 result is a direct economic health measure — higher means more stress. Unlike the old divergence framing, absolute stress is never hidden: if both groups are running hot, the score reflects it.
What a Recession Actually Is
The two-consecutive-quarters definition is wrong — or at least incomplete. The NBER looks at employment, income, consumer spending, and industrial production across the whole economy. A contraction driven by inventory drawdowns can technically meet the two-quarter test without most households feeling anything. Conversely, an economy can punish working people for years while GDP prints positive. GDPv2 is built for that second scenario — the one official statistics are worst at catching.
Common Questions
How accurate is the GDPv2 score?
The indicators GDPv2 uses — temp staffing, credit card delinquency, cardboard box production — have individually led NBER recession dates by 1–3 quarters in past cycles. The composite captures what those inputs are saying today. Whether current stress resolves through a GDP correction or dissipates is something no model determines in advance. The value is in knowing what the complete picture looks like now, not waiting for the quarterly headline.
Why does the score update daily if GDP is quarterly?
Because GDP isn't the only input. S&P 500 updates daily. Temp staffing, consumer sentiment, and the Cardboard Box Index update monthly. GDPv2 recalculates whenever fresh data arrives from FRED and The Economist's Big Mac Index — which means the score reflects current conditions, not what was true three months ago.
When was the last U.S. recession?
The NBER dated the COVID recession as February–April 2020 — two months, the shortest on record. Before that, the Great Recession ran December 2007 through June 2009. In both cases, temp staffing and credit card delinquency showed deterioration well before the official NBER dates.
THE SCORE, EVERY MONDAY.
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