The U.S. economy continues to show a moderately low level of risk of a prolonged recession with treasury spreads historically narrow and CFNAI below zero, yet unemployment is near all-time lows and GDP is growing at a strong 3.18%.
Comments on this week’s report:
- The spread between the 10-year and 3-month treasury yield remains inverted at -0.12% while the more closely watched 10-year minus 2-year spread remains historically narrow at 0.29%.
- The Chicago Fed National Activity Index (CFNAI) three-month moving average rose from -0.37 to -0.17 and still indicates a moderate level of risk.
- Growth in durable goods orders now indicates a high level of risk as its year-over-year growth rate continues to trend downward, dropping from -0.73% to -2.80%.
- Despite the year-over-year growth in housing starts dropping from 1.10% to -4.73% it still indicates a low level of risk as its readings can be volatile from month to month.