In today's post, we’ll update the top 6 economic indicators as of mid-March 2017. Each of the 6 indicators is updated with February data. Last month’s update is here. For background on the top 6 see here.
The table below shows the current heatmap for the top 6 indicators.
Just like last month all of the indicators are green. Here’s a brief update on each.
- Unemployment rate – February was another strong month for employment. UER is back down to 4.7%. Below its 12-month SMA. No signs of weakness in this indicator.
- Real retail sales – February’s year-over-year change held steady at 2.5%. No deterioration here either. Bonded blog had a good post this past week on real retail sales that is well worth reading.
- Industrial production – this month’s year-over-year change in IP slowed to 3.2%. Still not near a recession trigger.
- Permits – the headline permit number slowed quite a bit in February but this was after January’s blowout. Due to the noise in this series we use the year-over-year change in the 3-month SMA. That figure showed improving growth at 5.2%, up from last month’s reading.
- Leverage – about the same as last most at -0.80. No signs of concern here.
- Yield curve – slightly tighter at month-end at 190 bps but still well above last July’s low of 121 bps. As of this past Friday, post rate hike, it has narrowed a bit further to 180 bps.
Overall, a positive situation. Of course, there is always something to worry about. This week’s finance twitter freakout seems to be centered around the weakness in the Atlanta Fed’s GDPNow for Q1 2017 forecast which is down to 0.9% in its latest reading. Something to keep an eye on but other GDP nowcasts like the NYFed and the St. Louis Fed are not showing the same weakness and are currently much stronger at 2.8% and 2.5%, respectively. Another area of concern seems to be the slowdown in credit growth (see here if interested). Typically not a good indicator used on its own.
That’s it for this month. In summary, all 6 individual economic indicators are currently green.