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World headed for cyclical slowdown

Despite the U.S leading economic indicators appearing healthy, the global economy appears to be headed for a slow down, with only 34% of the 40 countries we track having leading economic indicators (LEI’s) signalling growth ahead, and the actual GDP-weighted Global LEI growth now below zero: The specific country details are displayed below: The European […]

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Dealing with a runaway market

Those of you who have been following us since 2010 will identify us a perma-bulls. Even in the depths of the ECRI 2012 /Hussman recession calls we were firmly bullish on the US economy and stock market – quite contrary to the popular consensus at the time. Those subscribers who have been diligently following the […]

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Negative returns for SP500 in next decade

The RecessionALERT Valuation Index (RAVI) has been updated for 1Q17 and for the first time since 1999, is forecasting negative 10-year total returns for the SP500: The chart on the right shows that the RAVI continues to forecast SP500 decade-ahead total returns with relative accuracy, especially when one considers that the green forecast line has […]

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25 most important US economic indicators animated in 1 minute

Here’s something fun we played with after just compiling our June Long leading US Index report for our subscribers

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Horrific revisions to HWOL data

The Conference Board Help-Wanted-Online (HWOL) program is closely followed by us to get a feel for the labor market. It is one of over two dozen labor indicators we examine. The monthly HWOL data have been produced by the Conference Board since May 2005, replacing the Help Wanted Advertising Index of print ads, which was […]

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Mixed Signals from Labor Market

We keep getting good news about employment and the labor market. But we rarely see the less optimistic numbers. THE GOOD Yellen’s Labor Dashboard (see here) is looking strong with all but 3 of the 9 components above pre-recession levels: The Employment Trend Index briefly wavered but now seems to be picking up steam again […]

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U.S Economy remains vulnerable

It is interesting to see the recent re-appearance of articles relating to flashing warning signals of recession (see here and here and here) It is true that some genuinely troubling signals are starting to make themselves known. Let’s look at some of them. Heavy Duty Truck sales, a reliable long-leading indicator for US recession, has […]

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Unemployment more widespread than thought

The Total Non-farm Payrolls data made another solid print for the month of July 2016, leading to the assumption that all is good with employment in the U.S: Similarly, if we examine the countrywide Civilian Unemployment Rate, we also get reassuring signs: However, if we dig deeper and examine the per-state unemployment rates for 52 […]

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NBER’s Big-4 Indicators had a narrow miss

Reading through all the positive press about jobs numbers and so forth, its hard to comprehend that the 4 main indicators used by the National Buro of Economic Research (NBER) to determine US recessions, had a narrow miss recently. If you recall from our popular 2012 article, the NBER does not define a recession in […]

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Number of countries with back-to-back negative quarterly GDP prints is rising

The percentage of 41 OECD countries around the globe that have just posted a negative 1Q2016 on the back of a negative  4Q2015 (old fashion technical recession) has started to rise. Its nothing to be concerned about just yet but the rise itself, although shallow, is something worth watching as 2Q2016 numbers start coming out.

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U.S Economy most vulnerable to any shock since 2008

The #Brexit vote caught the consensus view off-guard and stock markets, currencies and commodity prices have made large responses. This may be bringing up thoughts if Brexit could be the external shock that marks the decent of the U.S economy. Whilst we will not entertain making predictions on this complex matter, we can however state […]

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Recession Probability Roundup : Elevated levels

NOTE : This is a subscriber-only article that was made open for public viewership on 20 May 2016. A few subscribers have been concerned by the recent jump in recession odds of the Headwinds Index model to 60% A probability of recession of 60% most certainly also implies probability of no recession of 40% and […]

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Over 30% of States with rising unemployment

The March 2016 figures are in for state-wide unemployment and the percentage of states with growing unemployment has risen to over 30% now: The useful thing with this breadth metric is that deterioration in unemployment is made visible long before it shows up in the average national unemployment rate. Whereas the national unemployment rate is […]

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Labor market not as strong as you think

The strength of the labor market is constantly being trotted out in defense of the robust status of the US economy, but broad sets of labor data show this not to be the case. First, let us examine a very broad US labor market growth metric: This indicator needs to fall below -10 before the […]

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Animation : The incredible US employment recovery

Below is an animation of the annual average unemployment rate per U.S state from 2011 onward. It’s quite incredible to see how unemployment was erased state-by-state over the years: However statewide improvements in employment have probably peaked-out as shown in the chart below, which depicts the aggregate (equal weighted) inverse 6-month unemployment rate growth for […]

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How can we forecast 30% upside for 2016 with RAVI?

The RecessionALERT Valuation Index (RAVI) is currently forecasting 30% growth for 2016 for the SP500 with its 1-year forecast model. “How the heck is this possible given current overvaluation of the market?” we can hear you say. Let us show you how this is calculated so we can put the forecast into context: Firstly, we […]

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Bear market rules still in force

Our first bear market signal was issued on 1 September 2015 when the Composite Market Health Index (CMHI) dipped below zero. Since then we had a sustained deterioration of the CMHI components to reinforce the signal, coupled with high stock market volatility. Although market breadth features prominently in the CMHI, there is another way to […]

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Risk of U.S Economic Recession

A raft of analysts, perma-bears and bloggers are playing fast and loose with the R-word again. This is likely to reach a crescendo with the release today of the unexpected large drop in the ISM non-manufacturing survey.  We recall a time in late 2011 when the mainstream perception was that we were headed for recession […]

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Yellen Labor Dashboard reaches target

“Full Employment” target reached Shortly after taking up office, Federal Reserve Chair Janet Yellen  used her “jobs data dashboard”  to justify the Fed’s easy money policies and to argue there’s still considerable slack in the labor market  five years after the recession’s end. Seven of the nine gauges on  this dashboard had not recovered to levels […]

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Things that go bump in the night

The U.S economy appears unstoppable right now. Just about every leading and co-incident indicator you can think of is pointing to positive growth. Among the hundreds of indicators we follow for our models on a daily basis, we have discovered a few that are displaying worrying trends and flagging a future recession. It should be pointed […]

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