The Indicator Feb 2000 The Decade Cycle

The Indicator Feb 2000 The decade cycle

The decade cycle.

Where are we ?

The previous recession has been officially dated as having ended in July 1991. (US March 1991) In the past, the decade cycle has run around 8 to 11 years, trough to trough (ie recession to recession).

Measuring the worlds largest economy, the US, from cycle peak to trough, the following dates can be ascertained:


peak                 trough.

April 1960         February 1961

December 1969     November 1970

November 1973     March 1975

January 1980        July 1980

July 1981         November 1982

July 1990         March 1991
Source: US National Bureau of Economic Research.

From the last US recession, March 1991, to the present time, say Feb 2000, will be 107 months in duration. This compares to previous measured expansions (trough to peak) in the 1960's at 106 months, and in the 1980's of 92 months. You can see this current cycle expansion is in the record books now.

The correlation of the US decade cycle, and Australia is quite close.

It is usual for each cycle to run in a similar sequence of events, but have its own defining characteristics. This cycle has already been noted for its longer, slower and more sustainable level of business activity. (As EIS suggested it would.) And with the much lower levels of inflation, it is possible for business to maintain a longer term investment outlook. Technological innovation flourishes in such conditions.

We put the cycle at around twelve o'clock, moving into one o'clock now. The decade cycle is in top gear certainly. Given the nature of the entrepreneurial activity now taking place, and the investment being undertaken by big business in the emerging technologies, it is difficult to see a significant economic downturn taking place in the short term. Just note the order that is next from one o'clock. Much will depend on the inflation level over coming months. This is the figure to watch.

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