SMU Recession Monitor: Yield Curve Bears Watching

Indicators of economic activity in the U.S. do not predict an imminent recession, but the yield curve and housing permits should be on our radar screen.

Steel Market Update has been producing this report every three months. We are now increasing the frequency to two months as the pundits are discussing the timing of the next recession. Also, we have expanded our analysis to include the Chicago Fed’s National Activity Index and employment in truck driving. Economists consider recessions to be a necessary evil to clear out distortions that have arisen in the economy. Viewed individually, the leading indicators that we track offer limited insight into future economic expansion or contraction. Viewed collectively, they give subscribers a better idea of present and future business activity. Since World War II, most recessions have been preceded by an overheated economy as indicated by low unemployment, tighter monetary policy and rising long-term interest rates.