In my never-ending quest to bring to light the latest and most prescient economic indicators, I have discovered yet another number that matters … well, maybe.
According to the website Google Trends, the number of times the topic "recession" was "Googled" this month spiked to a level not seen since the first quarter of 2009, which just happened to be the depth of the Great Recession.
Their index for interest in "recession" in August is 79. For further context, the index for this topic in July was a mere 20. The interest in "recession" last December, a month in which there was a significant stock market correction, topped out at 32.
I am not sure what sparked such a vigorous interest in recessions this month, but I am increasingly concerned that we might just be talking our way into one.
Like I said, this is a new indicator for me, so I decided to compare it to something more familiar. I have included a chart of the rate-of-change curves derived from the Federal Reserve's monthly index on industrial production for the U.S. manufacturing sector and the index that measures U.S. output of plastics products. The plastics data is a subset of the manufacturing data.
This chart indicates that the growth rate in the total manufacturing data hit a cyclical peak at the end of last year, and it is currently in a period of decelerating growth. Such a period of decelerating growth is often the precursor of a period contraction in the data, but not always.
The quarterly growth rates from both the first and second quarters of this year were positive. For the year to date, total output for U.S. manufacturers is up less than 1 percent when compared with last year, but it cannot be accurately stated that the manufacturing sector is contracting. At least not yet.
The trend in the data from the plastics industry, which includes molded and extruded products but not resins, tooling or machinery, is less encouraging. The growth rate for our industry hit a cyclical peak in the middle of 2018, and the downward trend has persisted for more than a year. The quarterly growth rates for the first two quarters of 2019 were negative, and for the year to date, the total output of plastics products by U.S. processors is down just over 1 percent from last year.