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Capitol Report: These are the metrics the Fed uses to tell whether we’re headed for a recession

Everett Collection
How to know if there’s a recession monster lurking — there’s no single indicator, alas.

It’s the topic gripping markets as the U.S. economy approaches the longest expansion on record: When will the U.S. fall into recession, and how will we know?

The bad news is, there’s no single variable that can tell you a recession is about to come. But it turns out that a few, in combination, give you a pretty good idea. According to the St. Louis Fed, this is what usually happens before a recession:

• Oil prices have shot up ahead of nearly every post-war recession; asset bubbles swelled before the two most recent recessions; and the yield curve has inverted before all recessions since 1960.

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