Okay, I need to create a concise summary of this document about the U.S. Recession Scorecard from November 2022. Let me start by reading through the content carefully.
The main points seem to be about recession probabilities in the U.S. based on seven leading indicators. Three of them are already in the recessionary category: the yield curve (10-year to 1-year Treasuries), the Conference Board Leading Economic Index, and the ISM New Orders minus Inventories. The unemployment rate is still expansionary but at a 53-year low. The document suggests a recession is likely to start by Q2 2023.
The yield curve is highlighted as the most reliable indicator. It crossed into recessionary territory in July, with the gap widening in October. The ISM index has been negative since May, which is a sign of recession but also has some false positives. The unemployment claims were low in March 2022, and if they don't drop further, a recession might start in spring 2023. The unemployment rate is at 3.5% in September, needing to rise to 4.5% to signal a recession.
Other indicators like free cash flow and the Fed funds rate vs. GDP growth are still expansionary but the positive gap is narrowing. The conclusion is that the probability of a recession in late 2023 is growing.
I should make sure to mention the key indicators, their current status, and the timeline suggested. Also, note the caution about the unemployment rate not being a reliable signal yet. Need to keep it detailed but not too long, in English, without any markdown. Let me structure this step by step, ensuring all important points are covered concisely.
The U.S. Recession Scorecard for November 2022 indicates a growing likelihood of a recession by Q2 2023. Three of seven key indicators—yield curve (10-year to 1-year Treasuries), Conference Board Leading Economic Index, and ISM New Orders minus Inventories—have signaled recessionary conditions. The yield curve crossed into recessionary territory in July, with a widening negative gap in October, historically pointing to a recession starting about a year later. The ISM index has been negative since May, though it may have false positives. Unemployment claims, which hit a cycle low in March 2022, rose to 245,000 in July but fell to 208,000 by October, with a potential new low still possible. The unemployment rate reached a 3.5% multi-decade low in September, requiring a rise to 4.5% by December to signal recession, though such a threshold has not yet been crossed. Other indicators, including corporate free cash flow and the Fed funds rate vs. GDP growth, remain expansionary but show narrowing gaps. While the unemployment rate is currently expansionary, its low level suggests potential future tightening. Overall, the scorecard projects a recession likely to begin late 2023, with most indicators pointing to this timeline. The document notes that U.S. investment products are not insured or guaranteed by federal agencies and carry risks.
