ChangeWave Forecasts U.S. Recession in Jan 2008

ChangeWave's institutional clients were given critically important early intelligence on the start of the U.S. recession back in January 2008.

A glance at the chart below shows why we were one of the first to accurately forecast the recession. For the first time in our consumer spending surveys, the red line (% of consumers saying they'll spend less money going forward) had crossed above the blue line (% saying they'll spend more money).

In other words, for the first time we were clearly registering negative consumer spending growth.

From that point on, we've been able to closely track the continued decline in consumer spending, the bottom, and now the ongoing improvement as we climb out of the recession.

Key Leading Indicator: ChangeWave Overall Corporate IT Spending Survey Data (Aug 2006 - Nov 2009)
vs. S&P 500 Index

Every quarter, we conduct our Corporate IT Spending survey – where we ask nearly 2,000 business IT buyers: "Do you think your company will see an increase in IT spending, a decrease, or will IT spending remain the same for the next quarter vs. the current quarter?"

In the chart below, we've compared ChangeWave's Net IT Spending Score (Increase minus Decrease in spending) for the past 13 quarters (blue line) with the performance of the S&P 500 Index (black line) over that same time period.

Not only does the blue ChangeWave Net IT Spending Score line trend sharply downward in the months leading up to and throughout the first year of the recession, but then it clearly improves in February 2009 – three weeks before the stock market hits bottom.

Validation From Distinguished 3rd Parties

Integrity Research is an information and solutions provider that specializes in the investment research industry - covering more than 2,000 research firms in the U.S., Europe and Asia. Their coverage includes independent and non-traditional research boutiques, along with investment research-related trends, software and analytics.

Integrity Research recently produced a special report for their monthly subscribers featuring ChangeWave’s August 2009 consumer spending survey results.

For a copy of the full Integrity Research report, follow this link:
http://secure.integrity-research.com/ResearchInsight0809.pdf