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Last Updated: 05/04/20

Brave-Butters-Kelley Indexes (BBKI)

The Brave-Butters-Kelley Indexes (BBKI) are a research project of the Federal Reserve Bank of Chicago. The BBK Coincident and Leading Indexes and Monthly GDP Growth for the U.S. are constructed from a collapsed dynamic factor analysis of a panel of 500 monthly measures of real economic activity and quarterly real GDP growth. Monthly updates to the BBKI are released at 8:30 a.m. ET on scheduled days.

Indexes Point to Growth Falling Substantially Below Trend in March

The Brave-Butters-Kelley (BBK) Coincident Index was –4.2 standard deviations from trend growth in March 2020, and the BBK Leading Index was –4.3 standard deviations from trend growth. In annualized real gross domestic product (GDP) units, BBK Monthly GDP Growth was –10.8% in March. The trend component contributed 2.1%, the cycle component contributed –11.1%, and the irregular component contributed –1.8%. The leading subcomponent contributed –3.1% and the lagging subcomponent contributed –8.0% to the cycle component of BBK Monthly GDP Growth.

Monthly GDP Growth is indexed to the quarterly estimates from the U.S. Bureau of Economic Analysis and consists of three components: cycle, trend, and irregular components. The sum of the leading and lagging subcomponents of the cycle measured in standard deviation units from trend real GDP growth is the Coincident Index. Similarly, the leading subcomponent of the cycle is the Leading Index when measured in standard deviation units from trend real GDP growth.

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Notes: The shaded regions in the Business Cycle Indexes figure indicate official periods of recession for the U.S. as identified by the National Bureau of Economic Research. The dashed line corresponds to the optimal threshold values described in “A ‘big data’ view of the U.S. economy: Introducing the Brave-Butters-Kelley Indexes.” Coincident Index values below –1 have historically been associated with an elevated likelihood of a recession. Leading Index values below –1 have historically tended to signal an elevated likelihood of a recession eight months hence.

Recent values

Coincident Index
Leading Index
Cycle component
Leading subcomponent
Lagging subcomponent
Trend component
Irregular component
Monthly GDP Growth

Notes: All values are in annualized real GDP growth equivalent units with the exception of the Coincident and Leading Indexes, which are in standard deviation units from trend real GDP growth. The irregular component of Monthly GDP Growth cannot be estimated for a given month until quarterly real GDP is observed. Therefore, we do not report Monthly GDP Growth estimates beyond the last quarter of available GDP data. For more information on the model used to estimate Monthly GDP Growth, see “A new 'big data' index of U.S. economic activity.” The values in the table may not total because of rounding.

Note: The cycle component is the sum of the leading and lagging subcomponents in the Monthly GDP Growth (MGDP) figure.
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