Economic crisis indicators
What each data point measures, why it matters and when it should worry you. Click one to see its full page.
Updated
Credit and financial conditions 30% of the index
Whether companies and banks find it hard to borrow. When credit dries up, the trouble starts.
- Credit of risky companies How much more interest riskier companies pay than the government to borrow money.
- Credit of ordinary companies The same, but for solid mid-quality companies: how much more interest they pay than the government.
- Financial stress (St. Louis) A score that summarizes 18 weekly data points on interest rates, fear and credit. Zero is average stress.
- Ease of borrowing Measures how easy or hard it is to get financing in the US. Negative is easy; positive is hard.
Yield curve and cycle 20% of the index
What the bond market expects from the economy. It often warns months before a recession.
- Long vs short rates (2 years) Compares what the government pays to borrow for 10 years versus 2 years. Normally the longer term pays more.
- Long vs short rates (3 months) The same idea, comparing 10 years with 3 months. It is the version the New York Fed uses.
- Recession probability Probability that the US is already in recession, according to a statistical model.
Labor market 20% of the index
Whether people are starting to lose their jobs. It is what you notice most in real life.
Activity and spending 15% of the index
How much factories produce, how much people buy and how they feel.
- Factory output How much more (or less) US factories, mines and utilities produce than a year ago.
- Store sales How much more (or less) is being spent in stores than a year ago, adjusted for inflation.
- Consumer sentiment A survey that asks people how they see their economy. Here we look at how much that sentiment has changed over the…
Markets, currency and safe havens 15% of the index
Fear in the stock market, the strength of the dollar and whether investors are rushing to safe havens.
- Stock market fear (VIX) It is the “fear index”: it measures how much investors expect the US stock market to swing sharply.
- Dollar strength How much the dollar is worth against the world’s main currencies.
- Copper vs gold Compares copper (used in industry) with gold (bought out of fear) and looks at how that has changed over a year.
- Gold The price of gold, the classic refuge in times of fear.
- Copper The price of copper, widely used in industry and construction (nicknamed “Dr. Copper”).