None of four US recession gauges flashed an alarm on Oct. 30, based on figures from the St. Louis Federal Reserve and the US Labor Department.
All four measures carried a green reading. The Treasury yield spread and Sahm rule were on the non-alarm side of their thresholds, while unemployment and jobless claims were close to their one-year lows. The readings thus included both comparisons with signal thresholds and comparisons with the lowest levels recorded over the preceding year.
The spread between 10-year and two-year Treasury yields stood at positive 0.38 percentage point. The longer-term yield was therefore above the shorter-term yield, keeping the spread above the zero boundary that separates a normal curve from an inverted one.
The curve had spent no days inverted over the preceding two years. That puts both the latest reading and the two-year record on the non-inverted side of this gauge. The absence of an inversion therefore applied to the preceding two-year period as well as to the reference date.
The Sahm rule stood at 0.00 percentage point, against a recession-signal threshold above 0.5 percentage point. It measures how far average unemployment over three months has risen from its lowest three-month average in the past year.
The zero reading placed the measure 0.5 percentage point below that boundary. Readings above 0.5 have historically coincided with the start of a recession. At zero, the measure showed no rise in the three-month average from its lowest three-month average over the past year.
The unemployment rate stood at 4.2%, just 0.1 percentage point above its lowest level over the preceding year. This gauge also carried a green reading, although no numerical alarm threshold was supplied for the unemployment rate itself. Its distance from the one-year low was therefore a comparison with a recent minimum, without a specified numerical recession trigger.
The four-week average of initial jobless claims stood at 197,000. Initial claims count new applications for unemployment benefits. The average was unchanged from its one-year low, with a reported gap of 0%.
The claims gauge also carried a green reading. No numerical alarm threshold was supplied for claims, so its position can be compared with the one-year low but not with a specified recession trigger.
The four readings describe where the gauges stood on the reference date. Their green status does not establish that a recession has been avoided or predict whether one will occur.
