Recession Detection Using Real Time GDP Data

Abstract

This paper examines whether real-time GDP announcements can reliably identify business-cycle turning points. Using U.S. real-time GDP vintages from 1947 to 2021, we construct 4,356 recession indicators based on alternative smoothing methods and scaling variations. We then combine these indicators with alternative thresholds to generate 137,457 perfect recession classifiers. The selected classifiers identify all 12 historical recessions without generating false positives or false negatives. Restricting attention to the high-precision segment yields two classifiers with a standard deviation of detection errors below three months, while the selected ensemble signals recessions, on average, 3.04 months after their official onset. The framework accurately identifies recession episodes across vintages, suggesting that discrepancies in prior work may reflect limitations of traditional dating methods in addition to data revisions. Overall, the results indicate that real-time GDP announcements provide a practical proxy for NBER-style recession dating.