None of four US recession gauges flashed an alarm as of Oct. 26, based on readings from the St. Louis Federal Reserve and the US Labor Department.
The Treasury yield spread remained positive, and the Sahm rule stood below its recession signal level. Unemployment and initial jobless claims were at or close to their lowest readings over the past year.
The difference between 10-year and two-year Treasury yields was positive at 0.32 percentage point in the figures attributed to the central bank and the department. The longer-term Treasury therefore yielded more than the shorter-term security.
The threshold for an inverted curve is zero, with a negative spread putting the measure on the inverted side. The spread stood 32 basis points, or hundredths of a percentage point, above that dividing line.
The curve had spent no days inverted over the preceding two years. That comparison describes the spread’s recent history and does not establish what it will do next.
The Sahm rule reading was 0.00 in the figures attributed to the central bank and the department, against a recession signal threshold above 0.5 percentage point.
The rule compares three-month average unemployment with its lowest three-month average over the previous year. Readings above the threshold have historically coincided with the start of a recession.
At zero, the current reading showed no increase between those two unemployment averages. It therefore remained below the signal level.
The unemployment rate was 4.2% in the figures attributed to the central bank and the department. That was 0.1 percentage point above its lowest level over the past year.
The unemployment gauge carried a green designation, but no separate numerical alarm threshold was available. Its distance from the one-year low was a comparison, rather than an identified trigger for a recession signal.
The four-week average of initial jobless claims was 198,000 in the figures attributed to the central bank and the department. Claims measure applications for unemployment benefits.
That average was unchanged from its one-year low on the supplied percentage comparison. The claims gauge also carried a green designation, although no numerical alarm threshold was available for that measure.
The four readings cover Treasury yields, unemployment and applications for unemployment benefits. Their green designations describe where the gauges stood on the reference date.
The available thresholds put the yield spread on the positive side of zero and the Sahm rule below its signal level.
