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A recession is coming (eventually). Here’s where you’ll see it first.


The Fed is planning to cut rates, the yield curve is inverted, GDP slowed in the second quarter, and that has many peering into their crystal balls in an effort to spot the next recession. This piece from New York Times economics writer Ben Casselman takes a look at a few indicators that have historically been decent canaries in the coal mine. He points to four main indicators — the unemployment rate, the yield curve, consumer sentiment and the ISM manufacturing index — and also highlights a few wild cards like auto sales and residential building permits, among others. No one indicator generally predicts a recession, but his walk-through on these key points provides a bit of insight into where the economy stands. One caveat, though, via the author: “Economists are notoriously terrible at forecasting recessions, especially more than a few months in advance. In fact, it’s possible (though unlikely) that a recession has already begun, and we just don’t know it yet. ‘Historically, the best that forecasters have been able to do consistently is recognize that we’re in a recession once we’re in one,’ said Tara Sinclair, an economist at George Washington University. ‘The dream of an early warning system is still a dream that we’re working on.’ ”

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