{"id":68634,"date":"2024-06-13T20:07:34","date_gmt":"2024-06-14T01:07:34","guid":{"rendered":"https:\/\/olduvai.ca\/?p=68634"},"modified":"2024-06-13T20:07:34","modified_gmt":"2024-06-14T01:07:34","slug":"a-recession-indicator-with-a-perfect-record-has-been-flashing-red-for-20-months-it-may-not-be-wrong-yet","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=68634","title":{"rendered":"A recession indicator with a perfect record has been flashing red for 20 months. It may not be wrong yet."},"content":{"rendered":"<section id=\"post-headline\" class=\"post-headline-wrapper\n\n                      \"><\/p>\n<h3 class=\"post-headline  \"><a href=\"https:\/\/www.businessinsider.com\/recession-indicator-economy-inverted-yield-curve-campbell-harvey-fed-unemployment-2024-6\">A recession indicator with a perfect record has been flashing red for 20 months. It may not be wrong yet.<\/a><\/h3>\n<\/section>\n<figure class=\"figure image-figure-image  \" data-type=\"img\" data-e2e-name=\"image-figure-image\" data-media-container=\"image\">\n<div class=\"aspect-ratio\"><img decoding=\"async\" src=\"https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=700\" sizes=\"(min-width: 1280px) 900px\" srcset=\"https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=400&amp;format=jpeg&amp;auto=webp 400w, https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=500&amp;format=jpeg&amp;auto=webp 500w, https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=700&amp;format=jpeg&amp;auto=webp 700w, https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=1000&amp;format=jpeg&amp;auto=webp 1000w, https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=1300&amp;format=jpeg&amp;auto=webp 1300w, https:\/\/i.insider.com\/65de1459ce7f1785b2e4314d?width=2000&amp;format=jpeg&amp;auto=webp 2000w\" alt=\"Stock market crash recession graph\" \/><\/div>\n<p><span class=\"image-source-only \"><span class=\"image-source headline-regular\" data-e2e-name=\"image-source\">Yuichiro Chino\/Getty Images<\/span><\/span><\/figure>\n<div>\n<section class=\"post-content typography\n\n                          \" data-track-content=\"\" data-post-type=\"post\"><\/p>\n<div id=\"piano-inline-content-wrapper\" data-piano-inline-content-wrapper=\"\">\n<div data-component-type=\"content-lock\" data-load-strategy=\"exclude\">\n<div class=\"content-lock-content\">\n<ul class=\"summary-list premium\">\n<li>A recession indicator with a flawless record has been flashing red for 20 months.<\/li>\n<li>The economist behind the inverted yield curve says it&#8217;s too soon to declare it&#8217;s wrong this time.<\/li>\n<li>Campbell Harvey, a Duke finance professor, pointed to signs of a cooling job market to back his concerns.<\/li>\n<\/ul>\n<div id=\"formContainer\" class=\"inline-newsletter-signup headline-regular insider-today\" data-component-type=\"inline-newsletter-module\" data-event-label=\"insider_today\" data-newsletter-id=\"1\" data-newsletter-title=\"Insider Today\" data-acq-source=\"economyinlinesignup\">\n<section class=\"inline-newsletter-content\">\n<div class=\"inline-newsletter-insider-today-header\">\n<div>\n<div class=\"inline-newsletter-logo-tag\">\n<div class=\"inline-newsletter-logo\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<p class=\"preview\">A\u00a0<a href=\"https:\/\/www.businessinsider.com\/yield-curve-inversion-explained-what-it-is-what-it-means-2019-8\" target=\"_blank\" rel=\"noopener\" data-analytics-product-module=\"body_link\" data-analytics-post-depth=\"60\">recession indicator<\/a>\u00a0with a perfect track record has been flashing red for 20 months now, but the economist who pioneered its use warned against dismissing it just yet.<\/p>\n<p class=\"preview\">&#8220;I think it&#8217;s way too early to declare a failure,&#8221; Campbell Harvey\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=G6kHi7CN7Iw\" target=\"_blank\" rel=\"nofollow noopener\" data-analytics-product-module=\"body_link\" data-analytics-post-depth=\"60\">told Fox Business<\/a>\u00a0about the inverted yield curve.<\/p>\n<p class=\"preview\">The 3-month Treasury yield has climbed above the 10-year yield before eight of the past eight recessions dating back to the 1960s, without any false positives. Harvey, a finance professor at Duke University, first identified that pattern over 30 years ago.<\/p>\n<div class=\"premium-content\">\n<section class=\"content-recommendations-component in-content-recirc three-related-posts premium\" data-component-type=\"content-recommendations\" data-component-location=\"\" data-delay-third-party-scripts=\"true\" data-provider=\"dad\" data-excluded-verticals=\"bi-video\" data-premium-state=\"\" data-renderer=\"three-related-posts\" data-size=\"3\" data-container-position=\"\" data-container-name=\"content-recommendations-three-related-posts-in-content\" data-theme-class=\"\" data-recommendations-placement=\"\" data-author=\"\" data-root-margin=\"250px 0px\" data-track-view=\"{&quot;event&quot;:&quot;module_in_view&quot;,&quot;eventCategory&quot;:&quot;in_content_recirc&quot;,&quot;eventAction&quot;:&quot;module_in_view&quot;,&quot;eventLabel&quot;:&quot;module_in_view&quot;,&quot;element_name&quot;:&quot;in_content_recirc&quot;,&quot;subscription_experience&quot;:&quot;bi_value_unassigned&quot;,&quot;product_field&quot;:&quot;bi_value_unassigned&quot;}\">\n<div id=\"content-recommendations-three-related-posts-in-content\" class=\"content-recommendations-three-related-posts-in-content-container content-recommendations-container\">\n<div class=\"three-related-posts-container\">\n<div class=\"three-related-posts-tout content-recommendations-tout \">\n<p class=\"three-related-posts-tout-title content-recommendations-tout-title headline-bold ignore-typography\">Stock market crash: 60% downside for S&amp;P 500, expert warns<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<p class=\"premium\">The same yield curve has been inverted for around 20 months since October 2022. But past recessions have struck with up to a 23-month lag, Harvey noted.<\/p>\n<p class=\"premium\">&#8220;We&#8217;re still not out of the woods,&#8221; he said, noting the indicator will only exceed its historical lead time if there&#8217;s still no downturn by October.<\/p>\n<p class=\"premium\">Even so, he advised investors not to rely on his alarm bell alone, but to combine it with other measures to gain a fuller picture of the economy&#8217;s health and outlook.<\/p>\n<p class=\"premium\">Harvey pointed to several economic &#8220;red flags&#8221; including\u00a0<a href=\"https:\/\/www.businessinsider.com\/how-unemployment-rate-job-growth-looked-in-may-2024-6\" target=\"_blank\" rel=\"noopener\" data-analytics-product-module=\"body_link\" data-analytics-post-depth=\"80\">employment figures<\/a>\u00a0for May that were released on Friday. Headline unemployment\u00a0<a href=\"https:\/\/www.bls.gov\/news.release\/pdf\/empsit.pdf\" target=\"_blank\" rel=\"noopener\" data-analytics-product-module=\"body_link\" data-analytics-post-depth=\"80\">ticked up<\/a>\u00a0to 4%, with Black unemployment jumping from 5.6% to 6.1%. The labor force participation rate also dropped to 62.5% as some people exited the job market.<\/p>\n<p class=\"premium\">&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"post-content-more\">\n<div class=\"piano-inline-offer\"><\/div>\n<section class=\"content-recommendations-component three-related-posts\" data-component-type=\"content-recommendations\" data-component-location=\"end-of-article-recirc\" data-delay-third-party-scripts=\"true\" data-provider=\"dad\" data-included-verticals=\"economy\" data-excluded-verticals=\"bi-video\" data-premium-state=\"\" data-renderer=\"three-related-posts\" data-size=\"3\" data-container-position=\"\" data-container-name=\"three-related-posts-end-of-article-recirc\" data-theme-class=\"\" data-recommendations-placement=\"\" data-author=\"\" data-root-margin=\"250px 0px\" data-track-view=\"{&quot;event&quot;: &quot;module_in_view&quot;, &quot;eventCategory&quot;: &quot;end_of_article_recirc&quot;, &quot;eventAction&quot;: &quot;module_in_view&quot;, &quot;eventLabel&quot;: &quot;module_in_view&quot;, &quot;element_name&quot;: &quot;end_of_article_recirc&quot;, &quot;subscription_experience&quot;: &quot;bi_value_unassigned&quot;, &quot;product_field&quot;: &quot;bi_value_unassigned&quot;}\">\n<div class=\"content-recommendations-title-container\"><\/div>\n<\/section>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>A recession indicator with a perfect record has been flashing red for 20 months. It may not be wrong yet. Yuichiro Chino\/Getty Images A recession indicator with a flawless record has been flashing red for 20 months. The economist behind the inverted yield curve says it&#8217;s too soon to declare it&#8217;s wrong this time. Campbell [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[9218,1264,34710],"class_list":["post-68634","post","type-post","status-publish","format-standard","hentry","category-economics","tag-business-insider","tag-recession","tag-theron-mohamed"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=68634"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68634\/revisions"}],"predecessor-version":[{"id":68635,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68634\/revisions\/68635"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=68634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=68634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=68634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}