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Illustration: Eniola Odetunde/Axios

There is a 70% chance of recession within the next six months, according to a new recession indicator that examines the economy using a method previously used to analyze the resemblance of human skulls.

What it means: The new indicator comes from researchers at State Street Associates and MIT's Sloan School of Management who applied the principle of Mahalanobis distance to create a predictor of economic booms and recessions they call the KKT Index of the Business Cycle.

  • "This index offers a precise probability of recession or robust growth ... by comparing key variables to the patterns that prevailed during historical episodes," the study's co-author William Kinlaw, senior managing director at State Street Associates, tells Axios.
  • It creates the new business cycle metric by incorporating U.S. data including industrial production, nonfarm payrolls, stock market return and the slope of the Treasury yield curve (10-year rate minus the federal funds rate).

What's happening: The latest reading shows that recession is more than twice as likely as high growth in the next six months. When the probability of recession last reached these levels, a recession occurred 70% of the time.

  • "This level is driven primarily by two factors: weakening industrial production and the slope of the yield curve," Kinlaw says.
  • "By comparison, the unconditional likelihood of a recession occurring in any six-month period is only 17%."

Why it matters: Going back to 1916, the KKT Index has risen "leading up to every recession so that the combination of its trajectory and level provides a reliable indicator of the likelihood of recession," the study finds.

Go deeper:

Go deeper

3 hours ago - Health

Food banks feel the strain without holiday volunteers

People wait in line at Food Bank Community Kitchen on Nov. 25 in New York City. Photo: Michael Loccisano/Getty Images for Food Bank For New York City

America's food banks are sounding the alarm during this unprecedented holiday season.

The big picture: Soup kitchens and charities, usually brimming with holiday volunteers, are getting far less help.

5 hours ago - Health

AstraZeneca CEO: "We need to do an additional study" on COVID vaccine

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

AstraZeneca CEO Pascal Soriot said on Thursday the company is likely to start a new global trial to measure how effective its coronavirus vaccine is, Bloomberg reports.

Why it matters: Following Phase 3 trials, Oxford and AstraZeneca said their vaccine was 90% effective in people who got a half dose followed by a full dose, and 62% effective in people who got two full doses.

Updated 8 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus cases rose 10% in the week before Thanksgiving.
  2. Politics: Supreme Court backs religious groups on New York coronavirus restrictions.
  3. World: Expert says COVID vaccine likely won't be available in Africa until Q2 of 2021 — Europeans extend lockdowns.
  4. Economy: The winners and losers of the COVID holiday season.
  5. Education: National standardized tests delayed until 2022.