This is the daily update for today, December 18, 2025.
One word that discribes the US economy: Unstable
Based on the data provided, there are several indicators pointing to a somewhat elevated risk of recession within the US economy. The most concerning signals emerge from the economic data points which include a potential slowdown in demand and employment. For instance, the data on the U-6 unemployment rate shows an increase of 13% year-over-year, while the civilian unemployment rate also exhibits some volatile trends, rising to 9.5% in November. Additionally, the Industrial Production Index had negative growth in December, and the 4-Week Moving Average of Initial Claims for Unemployment demonstrates a see-sawing trend, dropping and then increasing over recent weeks. These fluctuations often indicate potential economic instability. Such fluctuations are also mirrored in the realm of finance, with the St. Louis Financial Stress Index, Kansas City Financial Stress Index, and the Chicago National Financial Conditions Index all showing increasingly negative trends, indicating heightened financial risk.
Furthermore, the data on manufacturing orders for both consumer goods and nondefense capital goods present some concerning fluctuations. Both confirm that demand for such goods has been weakening, with the cumulative year-over-year changes showing considerable decline, especially in nondefense capital goods orders, which dropped by as much as 18.5% in December. On top of that, a worrying aspect can be observed in the data pertaining to the Consumer Price Index, which has risen to 3.0% year-over-year, and the Consumer Price Index for All Urban Consumers (Excluding Food & Energy) has also surpassed 3.0% year-over-year, indicating persistent inflationary pressures. When examining the yield curve data, both the 10-year to 3-month and the 10-year to 2-year yield curves show inversion, which is a well-known sign of a potential economic downturn. Despite these indicators, other data such as retail sales and total vehicle sales have shown robust year-over-year growth, demonstrating some resilience in consumer spending. Therefore, while the imminent risk of recession cannot be firmly stated, the data does raise concerns and suggests the need for close monitoring of the economic situation.
Text written with ChatGPT from OpenAI.