The U.S. economy is showing a relatively higher level of risk as the CFNAI three-month average continues to trend away from zero, treasury spreads remain historically very narrow, and industrial production growth slows significantly. However, the overall economy is not showing any immediate sign of a recession as GDP continues to grow at a strong rate, inflation remains near a sustainable 2.00%, and unemployment sits near all-time lows.
Comments on this week’s report:
- Treasury spreads remain historically very narrow as the 10-year minus 2-year sits at 0.21% and the 10-year minus 3-month spread at -0.1%.
- The Chicago Fed National Activity Index (CFNAI) 3-month moving average remains below zero for the third consecutive month as is drops from -0.24 to -0.32, indicating a moderate level of risk.
- Industrial Production growth indicates a high level of risk as its year-over-year rate drops from 2.32% to 0.89%.
- Growth in housing still indicates a moderate level of risk despite its year-over-year rate increasing from -12.13% to -2.53% as it still remains below 0.00%.