Best Recession Indicators

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Disclaimer: For Education Only

Economic collapse news. The St. Louis Fed just published a paper describing the two best recession indicators and their reliability.  In fact they were comparing the two to see which is more reliable to predict recessions.  The problem is both have signaled in 2019 that a recession is coming.  The unemployment trough and the yield curve inversion.  What this means is that on average 1 month after the unemployment trough to 16 months after the trough the recession begins. We pour through their data and through these large banks all telling investors it is time to hedge.  JP Morgan, Morgan Stanley, and Goldman Sachs have all issued warnings this week that Investors have pushed all basic economic fundamentals out of their investment decisions.  This is very typical of the end of business cycles.

 

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Leading economic  indicators are usually the most important economic indicators. They provide current information that may predict future changes in the economy. Several types of important leading indicators are used in an economy.  The unemployment through and the yield curve inversion are the two most reliable leading indicators of a recession.

Employment Indicators

Employment indicators include the unemployment rate, average hours worked per week and average hourly earnings. These indicators provide information on the strength in the business environment and how much companies are willing to pay employees. Average hourly earnings can also work in tandem with the consumer price index to track the money amount of inflation in an economy.

Yield Curve Inversion

Click on the following link to retrieve an article about the Yield Curve Inversion.

 

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https://meditationsoncatholicism.blog/2019/03/22/yield-curve-and-financial-crash/

 

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