As the prospects for a fiscal stimulus fade, and the prospects for protectionist backlash remain, some observers ponder whether growth will stall before it gets started.
Figure 1: Nonfarm payroll employment for January (blue), February (red), March (green), April (black), and May (blue), in thousands, seasonally adjusted, all on a log scale. Source: BLS, various releases.
Here are five of the key indicators that the NBER Business Cycle Dating Committee (BCDC) have referred to in the past.
Figure 2: Log nonfarm payroll employment (blue), industrial production (red), personal income excluding transfers, in Ch.2009$ (green), manufacturing and trade sales, in Ch.2009$ (black), and monthly GDP, in Ch.2009$ (bold teal), all normalized to 2014M11=0. Source: BLS, Federal Reserve, BEA, and Macroeconomic Advisers (25 May release), and author’s calculations.
Most indicators are rising, albeit slower in some cases.
Term spreads are not indicative of a recession.
Figure 3: Ten year constant maturity minus two year constant maturity Treasury yields (blue), ten year minus three month yields (red), in percentage points. NBER defined recession dates shaded gray. Source: Federal Reserve Board via FRED, NBER, author’s calculations.
However, the fact that the spreads have reverted to roughly pre-election levels is indicative of a downward revision of growth prospects.