Earlier I posted some graphs from the Minneapolis Fed comparing this recession to a mildest, median, and harsh recession. Questions arose as to how the Fed was defining these categories - harshest overall? how defined? at what point? I took a look at the underlying data and saw a sensible procedure which seemed to make sense of what the Fed was doing and I posted that in the comments. After further questions, however, and after contacting the Fed it's now clear that the Fed is doing something else.
The mildest, median and harshest recessions in the Fed's graph are Frankenstein recessions, recessions cobbled together by taking bits of pieces of each past recession and assembling them to create a mild, median, and harsh recession - none of which ever occurred. I do not think this is a good way of looking at the data. To avoid some of these problems I have simply graphed all of the data below for every past recession. In the extension to this post you can also find the Fed's justification of their procedure from an email to me.
Addendum: In response to my query and post the Fed has flagged and improved their description of the data to better convey their procedure.
From Terry Fitzgerald at the Minneapolis Fed.
You are correct that the "mildest, median, and harshest" recession lines do
not represent single recessions. Please allow me to try to justify our
procedure. We spent considerable time weighing alternative approaches.
In drawing our timeline "length of recessions" graphs, we wanted to
illustrate where the current recession lies relative to past recessions at
each month of the recession. So for each month (or quarter), the lines
would tell you what had been the largest, median, and smallest decline in
any recession to that point.
The median line would indicate that one-half of the past recessions had
experienced larger declines, and one-half had experienced smaller declines
to that point. Similarly, no recession had a larger decline to date than
the "harshest" line. (And similarly for the mildest line.)
One feature of this approach is that the mildest, median, and harshest lines do not shift over time. So we can update just the "current" line in our graphs without all the lines shifting.
…I knew that insightful readers might wonder about this point, and I hoped that the note would at least explain what we did.
We are not trying to do anything deceptive or misleading with these charts.
Our aim is only to provide some empirical context to the current recession.