The Receding Risk of Recession

By Aaron Nathans

Economic conditions have improved, as our economic index rose to 67 in November, up from 58 in October, according to the new edition of Business Conditions Monthly, out today.

This is the third month in a row that the index is above the neutral 50 level. We do not believe there is enough evidence to suggest that the economy is on anything but a slow growth path. However, a reading of 67, the highest since September, provides solid evidence that the risk of recession in the months ahead has diminished.

The improvement was due to two of the 12 indicators improving from negative to neutral. They were consumer sentiment, as measured by the University of Michigan Index of Consumer Expectations, and real new orders for core capital goods.

It is unclear whether the improvement in consumer expectations has anything to do with the presidential election’s outcome, or simply the end of the campaign. Regardless, consumers remain the engine of growth, supported by a strong jobs market and rising consumer sentiment.

Click here to sign up for the Daily Economy weekly digest!

Sign up here to be notified of new articles from Aaron Nathans and AIER.