It’s not just bond and stock markets that can signal an economic downturn.
From the men’s underwear index, to the hemline index, there are also a number of more unconventional economic indicators that could be worth monitoring.
Fears of a recession have been on the rise recently. Investors have become increasingly concerned that record-high inflation amid the Russia-Ukraine war, coupled with the Federal Reserve’s plans to aggressively hike interest rates, could slow economic growth.
This deepening sense of unease has been reflected in the U.S. government bond market, through what is known as a yield curve inversion, which has historically occurred prior to recessions. Investors have been selling out of short-dated Treasurys in favor of longer-dated government debt, prompting 2-year bonds yields to rise above the 10-year rate.
However, economists have stressed that an inversion in bond yields is by no means a guarantee of a recession. Indeed, this indicator can emerge as much as two years before an economic downturn takes hold.
There’s a slew of other economic data that can act as recession signals, including employment and consumer spending figures. Market watchers have also turned to more unusual gauges of economic health.
CNBC