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Philly Fed Flashes a Recession Warning

Nice catch here by Pedro da Costa at Reuters.  He highlights a little followed indicator that is flashing a warning sign (comments via RBC):

“Here’s another indicator flashing red. The three-month trend for the Philly coincident index (which captures state employment and wage metrics) fell to a fresh cycle low of +24 in August – it was +80 just three months ago.

A reading this low historically bodes ill for future economic activity. Looking back at the last five downturns, this index averaged +41 three months prior to the official start of the recession. We have decidedly crossed that threshold.”

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