This is the daily update for today, March 7, 2026.
One word that discribes the US economy:
Overall, the bulk of the indicators point to a low near-term probability of recession but with meaningful downside risks. Model-based recession probability measures are very low (well under 1%), the Conference Board–style leading index sits above its recession-warning threshold, financial-stress indices are subdued, and payrolls showed continued hiring into January. Inflation is moderating toward the Fed’s comfort zone, and industrial-production and nondefense capital-goods orders are mixed-to-strong, which supports continued economic resilience.
That said, several important early-warning signs are flashing amber: the yield curve is very flat (10y–3m and 10y–2y spreads well below what historically signals healthy expansion), money-supply growth (M2) is below its recession-warning level, real personal income growth has decelerated toward concerning levels, retail sales and housing permits have weakened (with vehicle sales and permits showing notable downside), and some unemployment measures suggest softening labor-market conditions. Taken together, these leave the outlook as “low probability of an imminent recession but elevated risk over the next 6–12 months” — close monitoring of the yield curve, weekly initial claims, real personal income, retail sales, housing permits, and the leading index is warranted for any shift from slowdown to outright contraction.
Text written with ChatGPT from OpenAI.