Declining IVF rates might signal the next recession

Janet Yellen should, if she really wants to get a full picture of the US economy before deciding on Wednesday whether to raise interest rates, look at in-vitro fertilization rates in the US.

That’s because the IVF process, at $10,000 to $15,000 a pop, may turn out to be as good an indicator of the nation’s economic health as any more-traditional measures.

And since August, the number of IVF procedures in the US has dropped 30 percent — and doctors are scratching their heads and trying to figure out why.

I agree that this falls into the “Who knew?” category. And, admittedly, IVF — a process in existence only since 1978 — is too new to produce the kind of scientific track record that academics like.

But Dr. Norbert Gleicher, medical director and chief scientist at the Center for Human Reproduction in Manhattan, thinks the drop portends bad news for the US economy.

“We saw a clear dip,” says Gleicher, who spoke with me last week. And not only in his clinic. “I’m hearing from my colleagues that it is happening all over.”

Such a sharp drop-off is extremely odd in the IVF community.

Gleicher says that, “in 2008, we saw a significant downturn three to four months before the recession officially started.” In 2008, the gross domestic product fell 0.3 percent.

The IVF declines continued into 2009, when the total number of procedures for the year fell 1.1 percent, to 101,090, according to Gleicher. In 2009, the GDP was down 3.1 percent.

“Until [August], 2015 was a spectacularly good year,” Gleicher said.

To be sure, it is odd that IVF would be a leading economic indicator anyway, since the price puts it within reach of only a certain segment of the population.

Most health insurers won’t cover test-tube babies. So the loss of a job and the insurance that goes with it shouldn’t really matter.

Everyone already knows that the birth rate of children conceived the usual way fell off during hard economic times.

According to the most recent data from the US Department of Health and Human Services, births in the US showed a 1 percent increase in 2014.

This was the first rise since 2007. The so-called Great Recession began at the end of that year.

That makes perfect sense. If you can’t feed the mouths you already have, why produce more?

Gleicher can’t attribute reasons for the fall-off in test-tube baby procedures. But he says it was a good indicator of the last recession and he thinks the current IVF fall-off might be telling us another recession is coming.

In fact, Gleicher and others wrote a paper titled “Number of In Vitro Fertilization Cycles as Indicator of US Economic Activity.”

That report concluded that the “IVF cycle volume in the US appears reflective of US economic activity and, indeed, potentially could be a more sensitive parameter than gross domestic product.”

As you have probably heard, Yellen, the head of the Federal Reserve, this week will be considering the first interest rate hike in seven years. Her policy-making Federal Open Market Committee meets Tuesday and Wednesday. An announcement should come at 2 p.m. Wednesday.

I hope it’s not too late for her to take into account the Test Tube Baby Indicator.

Here’s a very logical macro-economic problem that the expected hike in interest rates will cause.

Wall Street knows that its good fortune has been caused by low interest rates. Savers who can’t make ends meet on next-to-nothing yields on bank accounts and such were forced into the stock market.

That caused stock prices to rise worldwide these past years. Even the thought of interest rate policy being reversed is already causing consternation on Wall Street, as you can see from the dip in stock prices in recent weeks.

So here’s the problem. The quarter-percentage-point increase in rates expected from the Fed isn’t going to make savers feel any richer. Their wealth has been decimated by seven years of near-zero interest rates.

But if the rate hike does hurt the stock market, those who were pushed into equities will definitely feel poorer. In fact, they probably already are feeling the effects.

The Fed is walking a tricky line that could lead to a pullback in spending by stockholders and no improvement in spending by those with savings accounts. Something like that could lead to the next recession.

In a July 30 column, I wrote that gasoline pump prices should have been 50 cents a gallon cheaper than they were at the time.

That was based on the decline that had already occurred in oil prices. I argued that refiners were holding back the savings to consumers.

Gasoline was at $2.89 a gallon back then, and oil coming from Texas was just under $52 a barrel.

Since oil prices kept dropping and are now at around $35 a barrel, we got more than a 50-cent-a-gallon decline in gas. It’s now under $2 a gallon in most states.

And Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices, notes that “while oil is the cheapest in more than 11 years, unleaded gasoline is only at its cheapest in six years.”

In other words, consumers are still being cheated.