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