Recession Probability (RPA)

RPA is a measurement of economic strength in the United States. I’ve taken the most common measurements of the economy such as unemployment, same store sales, GDP growth, business confidence, consumer comfort, and home values – and built a simple algorithm to measure their current strength compared to historical norms. The measurement is on a scale of 1 to 100, with 1 being the best and 100 being the worse. After publishing this information (started in November of 2007) and studying the backtests of the model we’ve found that the stock market generally is unfavorable (plain english=it goes down more than up) when the measurement is over 50.

Here’s the complete history of RPA updated automatically to the latest month end:

Month/YearRPAS&P 500S&P ReturnGrowth of $100,000 if exiting S&P 500 for month after RPA moves above 50
Oct-0754.31549.381.5%$101,482.23
Nov-0744.91481.14-4.4%$101,482.23
Dec-0765.61468.36-0.9%$100,606.60
Jan-0877.51378.55-6.1%$100,606.60
Feb-0883.41330.63-3.5%$100,606.60
Mar-0889.41322.7-0.6%$100,606.60
Apr-0892.41385.594.8%$100,606.60
May-0883.41400.381.1%$100,606.60
Jun-08761280-8.6%$100,606.60
Jul-0864.11267.38-1.0%$100,606.60
Aug-08601282.831.2%$100,606.60
Sep-0852.51166.36-9.1%$100,606.60
Oct-0864.5968.75-16.9%$100,606.60
Nov-0871.5896.24-7.5%$100,606.60
Dec-0886.4903.250.8%$100,606.60
Jan-0989.4825.88-8.6%$100,606.60
Feb-0974.5735.09-11.0%$100,606.60
Mar-0971.5797.878.5%$100,606.60
Apr-0967.1872.819.4%$100,606.60
May-0961.1919.145.3%$100,606.60
Jun-0956.6919.320.0%$100,606.60
Jul-0953.5987.487.4%$100,606.60
Aug-0952.61020.623.4%$100,606.60
Sep-0943.21057.083.6%$100,606.60
Oct-0939.71036.19-2.0%$98,618.41
Nov-0938.81095.635.7%$104,275.56
Dec-0940.11115.11.8%$106,128.59
Jan-1042.51073.87-3.7%$102,204.57
Feb-1044.71104.492.9%$105,118.80
Mar-1045.21169.435.9%$111,299.40
Apr-1042.21186.691.5%$112,942.11
May-1043.91089.41-8.2%$103,683.57
Jun-1041.31030.71-5.4%$98,096.86
Jul-1040.21101.66.9%$104,843.74
Aug-1040.11049.33-4.7%$99,869.00
Sep-1039.81141.28.8%$108,612.64
Oct-1039.71183.263.7%$112,615.66
Nov-1040.71180.55-0.2%$112,357.74
Dec-1039.31257.646.5%$119,694.70
Jan-1140.21286.122.3%$122,405.26
Feb-1134.51327.223.2%$126,316.92
Mar-1128.31325.83-0.1%$126,184.62
Apr-1132.81363.612.8%$129,780.30
May-1131.31345.2-1.4%$128,028.15
Jun-1134.31320.64-1.8%$125,690.67
Jul-1138.71292.28-2.1%$122,991.53
Aug-1146.21218.89-5.7%$116,006.71
Sep-1161.091131.32-7.1%$115,942.94
Oct-1167.051253.3010.8%$115,942.94
Nov-1159.61246.96-0.51%$115,942.94
Dec-1149.61257.600.85%$115,942.94
Jan-1243.211312.414.4%$121,044.43
Feb-1238.741365.684.1%$126,007.25
Mar-1232.781408.473.1%$129,913.48
Apr-1237.251397.91-0.7%$129,004.09
May-1241.721313.32-6.1%$121,199.34
Jun-1247.681362.163.71%$125,706.53
Jul-1252.151379.721.29%$127,327.05
Aug-1249.171406.580.00%$127,327.05
Sep-1252.151440.672.42%$130,412.96
Oct-1244.701412.160.00%$130,412.96
Nov-1247.681416.180.28%$130,784.21
Dec-1245.131426.190.71%$131,708.63
Jan-1346.191498.115.04%$138,350.44
Feb-1343.211514.683.32%$142,952.77
Mar-1337.251569.193.53%$147,997.41
Apr-1340.231597.571.81%$150,676.16
May-1332.781630.742.1%$153,804.62
Jun-1329.801606.28-1.5%$151,497.66
Jul-1329.801685.734.9%$158,991.05
Aug-1323.841632.97-3.1%$154,014.95
Sep-1326.821681.553.0%$158,635.40
Oct-1329.871756.544.5%$165,773.99
Nov-1329.811805.812.8%$170,415.66
Dec-1329.831848.362.4%$174,505.64
Jan-1431.291782.59-3.5%$168,296.23
Feb-1434.271859.454.31%$175,552.67
Mar-1434.271872.340.01%$176,769.63
Apr-1429.81883.950.62%$177,865.74
May-1428.311923.572.1%$181,600.92
Jun-1425.31960.231.9%$185,051.34
Jul-1422.351930.67-1.5%$182,275.57
Aug-1417.882003.373.77%$189,139.22
Sep-1420.861972.29-1.55%$186,204.94
Oct-1419.372018.052.32%$190,525.17
Nov-1416.392067.562.45%$195,199.43
Dec-1417.882058.90-0.42%$194,381.84
Jan-1514.901994.99-3.10%$188,348.06
Feb-1520.862105.505.49% $198,686.96
Mar-1520.862067.89-1.74% $195,230.58
Apr-1522.352085.510.85% $196,894.10
May-1517.882107.391.05% $198,959.79
Jun-1511.922063.11-2.10% $194,779.32
Jul-1511.92TBDTBDTBD