8 recession signals to monitor

Take a look at data points market watchers are following for signals of a potential U.S. recession.

Is a recession coming and, if so, when will it begin and how prolonged will it be? These are weighty questions with no definitive answers, but some indicators may help provide clues.

The U.S. economy has been in a period of expansion. Stock market growth, declining underemployment and loan delinquencies helped keep Americans’ personal financial satisfaction near its all-time high during the second quarter of 2019, according to the AICPA’s Personal Financial Satisfaction Index (PFSi), released in late July. The PFSi measured 37.8 for the second quarter, 0.8 points (2.1%) below the first quarter’s record high. It was 8.4 points (28.8%) higher year over year.

In the most recent Business & Industry Economic Outlook Survey conducted by the AICPA, U.S. business leaders remained significantly more confident about the domestic economy than the global economy.

The survey’s CPA Outlook Index (CPAOI) dipped one point to 75 out of 100, reflecting slight easing in expansion, revenue, and profit expectations. The index peaked at 81 in the first quarter of 2018.

Against this backdrop, some historical data is helpful. This interactive graphic from Reuters breaks down eight indicators that may be useful in discerning where the economy is heading.

SPONSORED QUIZ

How well do you know small business?

There are over 30 million small businesses in the U.S., and many of them are optimistic in their outlook. Are you familiar with the obstacles and opportunities they are facing? Test your small business acumen with this quiz sponsored by Chase Ink®.

SPONSORED REPORT

In focus: Payroll

Providing payroll services that comply with ever-changing regulations and meet evolving employee and employer demands is no easy task. Paychex's Tom Hammond discusses common payroll considerations for CPA firms.