A modestly positive economic trend held US recession risk at a low level through November. Although recent updates revealed some unexpected weakness in last month’s activity (retail sales and industrial production), the broad macro profile continues to reflect a growth bias that appears set to continue in the near term.

Data published to date strongly imply that November’s economic profile is unlikely to mark the start of an NBER-defined recession. Corroborating evidence can be found in recent fourth-quarter GDP nowcasts from the Atlanta and New York Fed banks. Although the Q4 projections currently anticipate softer growth vs. Q3, the projected increases imply that a new recession is a low-probability threat at the moment.

A positive trend is also conspicuous in The Capital Spectator’s proprietary business-cycle indexes. As projected earlier in the year (see bottom chart here and here, for instance), US economic activity has rebounded after a slowdown in the first half of 2016. Although red ink continues to weigh on some components (see table below) that comprise the benchmarks, the broad trend has improved lately and current projections (see last chart below) still point to modest growth in the immediate future. (Keep in mind that The Capital Spectator monitors the macro trend across a broader set of data and analytics on a weekly basis in The US Business Cycle Risk Report.)

Aggregating the data in the table above into business cycle indexes continues to reflect a broad trend that remains solidly positive. The Economic Trend and Momentum indices (ETI and EMI, respectively) ticked higher in November vs. last month’s update and both benchmarks remain moderately above their respective danger zones: 50% for ETI and 0% for EMI. When/if the indexes fall below those tipping points, we’ll have clear warning signs that recession risk is at a critical level, in which case a new downturn is likely. The analysis is based on a methodology outlined in Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks.