Market Overview Analysis by James Picerno covering: . Read James Picerno's latest article on Investing.com
A broad set of US economic indicators continue to show that the odds are low that an NBER-defined recession has started or is imminent. This profile upends the dark narrative favored in some quarters. There are possible warning signs brewing on the horizon, but the case for expecting trouble is still weak, according to the numbers.
Looking ahead, the possibility is rising that one or both of the indicators in the chart above will fall below their respective tipping points that mark recession. To gauge this possibility, an econometric technique is used to generate forward estimates of both indicators through June. For a deeper review of where trouble may be lurking in the months ahead, consider the underlying components of ETI and EMI, as shown in the table below. The labor market is on the shortlist for possible net-negative contributors to the economic trend.
Despite these concerns, it’s important not to be overly focused on a handful of indicators. Ultimately what matters is how the aggregate trend evolves. To do so, I use a robust econometric technique with an encouraging history to generate forward estimates of all the indicators shown above, and thereby forecast ETI and EMI. The results strongly suggest that the US expansion will continue through June.
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