After nearly three years of writing and researching, my new book is finally here — Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks Ahead Of The Crowd. This short title (154 pages) can be thought of as a companion guide to the macro updates on The Capital Spectator (see here and here, for instance). The methodology outlined in the book is the econometric engine for the monthly releases of the US Economic Profile.

Those updates, by the way, have an encouraging track record. As regular readers know, the Economic Trend and Momentum indices have consistently told us that recession risk has been relatively low for some time. That may be obvious now, but it’s been a controversial call at times. Indeed, some analysts have insisted that trouble was just around the corner. But the data has been clear all along. In February 2013, for instance, I wrote a piece for Bloomberg Briefs that argued that recession risk was low. A number of high-profile analysts at the time were saying the opposite—a new recession was imminent, they warned. But they were wrong, and for an obvious reason: they weren’t looking at a set of broadly diversified macro benchmarks through an econometrically robust lens.

As I explain in Nowcasting Recession Risk, economic slumps rarely arrive as bolts from the blue via one or two metrics; instead, recessions tend to reflect a rising tide of deterioration across a spectrum of indicators. The goal is recognizing when the deterioration reaches a tipping point. But the analysis can be tricky because every recession is different in some degree and so you have to cast a wide net when looking for early warning signs. In a world with countless possibilities for measuring economic activity, it’s essential to build business cycle indices that minimize the potential for false signals.

Drawing on theory and the empirical record, Nowcasting The Business Cycle lays out a roadmap for intelligently analyzing the mother of all known (and recurring) economic risk factors. Developing objective intelligence on this front is crucial for several reasons, including one that should be obvious: there’s always another recession lurking out there somewhere.

I’ll be posting some excerpts in the days ahead. Meanwhile, here’s a look at the book’s outline: