The overall economy is now indicating a more moderate level of risk of a recession as more prominent indicators show signs of a potential slowdown. However, unemployment remains near all-time lows and real GDP is still growing at a fairly stable 2.29%.
Comments on this week’s report:
- Treasury spreads narrowed as the 10-year minus 2-year falls to 0.21% and the 10-year minus 3-month falls back below zero to -0.02%.
- Real GDP has slowed following the second quarter of 2019 as its year-over-year growth rate falls from 2.65% to 2.29%. If Real GDP were to trend any lower a moderate level of risk may be warranted.
- Corporate profits now indicate a moderate level of risk as its year-over-year growth drops from 9.79% to -1.97% for the period ending March 31st, 2019.
- New orders of durable goods recognized a much needed boost in June as its year-over-year rate rises from -3.74% to -1.64%. However, a high level of risk is still warranted unless new orders continue to rise.