Contraction (economics) - Predictors

Predictors

Although there are no completely reliable predictors, the following are regarded to be possible predictors.

• Inverted yield curve, the model developed by economist Jonathan H. Wright, uses yields on 10-year and three-month Treasury securities as well as the Fed's overnight funds rate. Another model developed by Federal Reserve Bank of New York economists uses only the 10-year/three-month spread. It is, however, not a definite indicator;
• The three-month change in the unemployment rate and initial jobless claims.
• Index of Leading (Economic) Indicators (includes some of the above indicators).
• Lowering of asset prices, such as homes and financial assets, or high personal and corporate debt levels.