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 3.20%.
Comments on this week’s report:
- Treasury spreads remain historically low with the 10-year minus 3-month inverted at -0.18% and the more closely watched 10-year minus 2-year at 0.25%.
- University of Michigan’s Consumer Sentiment index rose from 97.20 to 100.00 further indicating low level of risk.
- The St. Louis Fed Financial Stress Index remains near all-time lows at -1.25, indicating a very low level risk.
- The core Personal Consumption Expenditure (PCE) index is growing at a relatively slow year-over-year rate of 1.60%, indicating a moderate level of risk.