U.S. Economy

Anatomy of a Recession

Where do we stand - and what should we watch for in the coming months?

The coronavirus pandemic has unleashed unprecedented market volatility with the ClearBridge Investments Recession Risk Dashboard turning red in April signaling a recession was underway. In early June, the National Bureau of Economic Research announced that economic activity peaked in February leading the beginning of the first U.S. recession in over a decade.  As a result, the ClearBridge Investments Recovery Dashboard was introduced in Q2 to help identify conditions that have been historically instrumental in forming durable economic and market bottoms. This dashboard is comprised of nine indicators that fall into three key elements necessarily for a lasting recovery: Financial, Economic, Confidence. Click on each tab for a different view of the Recovery Dashboard data.

U.S. Recession Recovery

  • 9 variables have historically foreshadowed a durable recovery
  • The overall signal suggests the economy has started a new economic expansion


Data as of  30 June, 2020. 
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. 
Source: The National Bureau of Economic Research  

Sources: ClearBridge Investments, BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg. The ClearBridge Recession Risk Dashboard was created in January 2016. References to the signals it would have sent in the years prior to January 2016 are based on how the underlying data was reflected in the component indicators at the time.

Recovery by Comparison

  • 9 variables have historically foreshadowed a durable recovery
  • The overall signal suggests the economy remain in a recession
Data as of 30 June, 2020. 
Sources: ClearBridge Investments, BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg. The ClearBridge Recession Risk Dashboard was created in January 2016. References to the signals it would have sent in the years prior to January 2016 are based on how the underlying data was reflected in the component indicators at the time.

U.S. Recovery Case Dashboard

Case Study: 2007-2010
Source: BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg.

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1 Each indicator can signal expansion, caution or recession based on the latest readings and ClearBridge’s analysis of the underlying trends. The signals and their changes are based on ClearBridge’s analysis and interpretations of the data. The ClearBridge Recession Risk Dashboard is not a crystal ball, but it can serve as a tool to help evaluate the risk of recession. The indicator is updated monthly using the most recent data available, supplied by Clearbridge.

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