Down for the Count: Is Gloomy Talk Self-Perpetuating?

Number of Times WSJ Uses 'Recession' Usually Indicates Whether We're in One

By Published on .

LOS ANGELES (AdAge.com) -- So are we really in recession? Here's one simple economic indicator that doesn't bode well: the number of Wall Street Journal stories mentioning "recession."

For precedent, consider the number of Journal stories with "recession" mentions going into the past two downturns.

In 2001, "recession" references shot up three months before what would turn out to be the official recession start (March) and climaxed two months after the recession trough (November, the economy's low point), according to an Ad Age DataCenter analysis.

In the 1990-91 downturn, "recession" mentions also spiked at what was later determined to be the start of the recession.

And now? "Recession" references surged in December and January to the highest level since early 2002 (just after the 2001 downturn's trough). This could foreshadow an official proclamation down the road that a recession began in late 2007 or early '08.

If there is a recession, when will it end? No need to wait for an official determination. When the Journal's monthly "recession" mentions start trending downward, prospects for the economy should start looking up.
In this article:
Most Popular