Friday, November 18, 2011

Recession Watch

Here are charts of some of the indicators used by the NBER to determine whether or not the US is in or headed toward a recession:

Real GDP continues to increase, and in fact is now slightly above the peak of the previous expansion.

Real retail sales stalled for most of this year, but have increased for the last two months.

Industrial production is still moving upwards, although at a slightly reduced rate.

Personal income less transfer payments are still increasing, but are far below the previous peak.

As usual, the one big problem area is employment, or perhaps, more appropriately, the lack thereof.

Let me add a few more indicators that I use:

The ISM manufacturing index declined sharply earlier this year, but is still ever-so-slightly positive.

The ISM services index is showing a reading above positive.

Weekly initial claims are now slightly below 400,000.

Bottom line: the indicators say we're in for more fits and starts growth.