Recession Watch Indicator for week ended August 31, 2012

Here's my own personal cut at a recession watch indicator, for week ended August 31, 2012:

• ECRI Weekly Leading Index Growth Rate: just turned slightly positive (+0.3) – pale GREEN flag (+1)
• Weekly Employment Insurance Initial Claims moving average: elevated but below 400K (370K) – pale green flag (+1)
• Recent M2 Money Stock: rising – pale green flag (+1)
• Macroeconomic Advisers GDP outlook for Q3: modest growth (raised to +2.2%) – pale green flag (+1)
• Recent Employment Growth: modest (163K) – pale green flag (+1)
• Recent ISM Manufacturing Reports: slightly negative (49.8) – pale yellow flag (-1)
• Recent ISM Services Reports: modestly positive (52.6) – pale green flag (+1)
• Average: +0.71 – pale green – recession not likely but still possible

No real change in the overall outlook since last week.

 

-- Jack Krupansky

Recession Watch Indicator for week ended August 17, 2012

Here's my own personal cut at a recession watch indicator, for week ended August 17, 2012:

• ECRI Weekly Leading Index Growth Rate: very modestly negative (-0.6) – pale yellow flag (-1)
• Weekly Employment Insurance Initial Claims: elevated but below 400K (366K) – pale green flag (+1)
• Recent M2 Money Stock: rising, but flat in recent weeks – pale green flag (+1)
• Macroeconomic Advisers GDP outlook for Q3: modest growth (+1.9%) – pale green flag (+1)
• Recent Employment Growth: modest (163K) – pale green flag (+1)
• Recent ISM Manufacturing Reports: slightly negative (49.8) – pale yellow flag (-1)
• Recent ISM Services Reports: modestly positive (52.6) – pale green flag (+1)
• Average: +0.57 – pale green – recession not likely but still possible

No real change in the overall outlook since last week.

 

-- Jack Krupansky

Recession Watch Indicator for week ended August 10, 2012

Here's my own personal cut at a recession watch indicator, for week ended August 10, 2012:

• ECRI Weekly Leading Index Growth Rate: modestly negative (-1.3) – yellow flag (-2)
• Weekly Employment Insurance Initial Claims: elevated but below 400K (368K) – pale green flag (+1)
• Recent M2 Money Stock: rising – green flag (+2)
• Macroeconomic Advisers GDP outlook for Q3: modest growth (+1.9%) – pale green flag (+1)
• Recent Employment Growth: modest (163K) – pale green flag (+1)
• Recent ISM Manufacturing Reports: slightly negative (49.8) – pale yellow flag (-1)
• Recent ISM Services Reports: modestly positive (52.6) – pale green flag (+1)
• Average: +0.43 – pale green – recession not likely but still possible

No real change since last week.

 

-- Jack Krupansky

Are retail sales a leading indicator for the economy?

As I think about what economic factors to include in a recession watch indicator, retail sales come up. It's hard to ignore the consumer/retail portion of the economy, being 70% of GDP, but I see the retail/consumer segment as the effect rather than the cause of economic activity. Sure, consumer/retail sales continue to cycle money through the economy, but it is business and government decisions about investment that actually "drive" the economy. To me, employment, unemployment insurance initial claims, and manufacturing and services activity are the important drivers for the economy.

-- Jack Krupansky

Recession Watch Indicator for week ended August 3, 2012

Here's my own personal cut at a recession watch indicator, for week ended August 3, 2012:

• ECRI Weekly Leading Index Growth Rate: modestly negative – yellow flag (-2)
• Weekly Employment Insurance Initial Claims: elevated but below 400K – pale green flag (+1)
• Recent M2 Money Stock: rising – green flag (+2)
• Macroenconomic Advisers GDP outlook for Q3: modest growth – pale green flag (+1)
• Recent Employment Growth: modest – pale green flag (+1)
• Recent ISM Manufacturing Reports: slightly negative – pale yellow flag (-1)
• Recent ISM Services Reports: modestly positive – pale green flag (+1)
• Average: +0.43 – pale green – recession not likely but still possible

-- Jack Krupansky