Valuation – Real S&P 500 Index with Recessions and S&P 500 Shiller CAPE Ratio An elevated CAPE ratio suggests caution, but it isn’t a reliable market timing indicator. Ignoring the CAPE ratio is like playing poker without understanding the odds—you might win big, but you’re more likely to lose your shirt. Image: Real Investment Advice
Probability of U.S. Recession In the Next 1 Year Goldman Sachs predicts a 15% chance of a U.S. recession in the next one year—much like the chances of sticking to a New Year’s resolution! Image: Goldman Sachs Global Investment Research
U.S. Heavy Truck Sales and Recessions U.S. heavy truck sales fell in October to 390K (annualized). Before recessions, heavy trucks sales tend to peak and then decline, providing insights into the overall health of the U.S. economy as a leading economic indicator. Click the Image to Enlarge
U.S. Recession Probability The consensus likelihood of a recession in the United States over the next year is estimated to be around 25%, which points to a moderate risk of an economic downturn. Image: Deutsche Bank
Probability of U.S. Recession Calculated from the Yield Curve The probability of a U.S. recession in 12 months, calculated from the yield curve, stands at 32.9% in November. Image: Federal Reserve Bank of Cleveland
Smoothed U.S. Recession Probabilities The probability of U.S. recession stands at 1.02%. When this recession indicator exceeds 5% (red line), history suggests that the probability of recession increases significantly. The chart shows the smoothed U.S. recession probabilities indicator on a log scale. Smoothed U.S. recession probabilities are obtained from a dynamic-factor markov-switching model applied to…
U.S. New Private Housing Units Authorized by Building Permits and Recessions In October, U.S. building permits declined to 1.416 million, falling below expectations. Historically, building permits tend to peak and then decline before recessions. Image: Federal Reserve Bank of St. Louis
U.S. Real Retail Sales and Recession In October, U.S. real retail sales stand at 0.27% YoY. About 70% of U.S. GDP is personal consumption. In the past, real retail sales trended sideways before the recession began.
Market-Implied Probability of a Recession Starting Within 1 Year and Market-Implied Probability of Being in a Recession The current market-implied probability of a US recession occurring within the next 12 months stands at 29%, which is significantly higher than the long-term average. Image: Goldman Sachs Global Investment Research
Temporary Help Services Jobs vs. Real GDP and U.S. Recessions Temporary Help Services Jobs stand at -6.96% YoY in October. The relationship between Temporary Help Services jobs and the macroeconomy is complex. Declines in Temporary Help Services Jobs are often considered a leading indicator of a potential recession (red line at -3.5%), but they do…
Recession – NFIB Sales Expectations Optimism among U.S. small business owners regarding future sales has significantly declined, with many anticipating a drop in revenues over the coming months. Image: Real Investment Advice