Decision Analyst's December Economic Index Indicates Recession Is Likely

Arlington, Texas—The Decision Analyst U.S. Economic Index for November 2022 was 103, up 2 points from October 2022 (101), but down 9 points from November 2021 (112). The Economic Index has, on average, trended downward over the past 12 months. Since the U.S. Economic Index tends to be a leading indicator of the overall U.S. economy in the next six to 12 months, the downward trend suggests a likely slowdown in the U.S. economy in the closing months of 2022 and the first half of 2023. The past 20-year history of the Index is shown below.

“The decline in the Economic Index over the past 12 months has been driven by high inflation rates, particularly in energy, food, and housing costs. Inflation reduces consumers’ purchasing power and tends to weaken the economy. Labor shortages are a barrier to future economic growth. COVID—and especially long COVID—continue to act as economic challenges, but this effect is waning. Many sectors of the U.S. economy (and the world economy) continue to be impaired by supply-chain disruptions because of lockdowns in China and the war in Ukraine. Actions by an aggressive Federal Reserve are pushing interest rates higher in the U.S. and worldwide. These higher interest rates will depress economic activity in coming months,” said Jerry W. Thomas, President/CEO of Decision Analyst, “and will also raise the risk of financial crises, as the rising U.S. dollar undermines other currencies.”

Methodology

The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.

Decision Analyst conducts its concurrent economic surveys each month in Argentina, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.

About Decision Analyst

Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 40 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.

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