June 29, 2022

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These unusual indicators may be worth monitoring

2 min read

The completion of the world’s tallest buildings is said to be one less conventional indicator of an economic downturn. Pictured here on April 3, 2022, is the Merdeka 118 tower in Malaysia, which was completed at the end of the 2021 and is said to be the world’s second tallest skyscraper.

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It’s not just bond and stock markets that can signal an economic downturn.

From the men’s underwear index, to the hemline index, there are also a number of more unconventional economic indicators that could be worth monitoring.

Fears of a recession have been on the rise recently. Investors have become increasingly concerned that record-high inflation amid the Russia-Ukraine war, coupled with the Federal Reserve’s plans to aggressively hike interest rates, could slow economic growth.

This deepening sense of unease has been reflected in the U.S. government bond market, through what is known as a yield curve inversion, which has historically occurred prior to recessions. Investors have been selling out of short-dated Treasurys in favor of longer-dated government debt, prompting 2-year bonds yields to rise above the 10-year rate.

However, economists have stressed that an inversion in bond yields is by no means a guarantee of a recession. Indeed, this indicator can emerge as much as two years before an economic downturn takes hold.

There’s a slew of other economic data that can act as recession signals, including employment and consumer spending figures. Market watchers have also turned to more unusual gauges of economic health.

Skyscraper index

British economist Andrew Lawrence developed the so-called “skyscraper index” in 1999. The measure links the construction of the world’s largest buildings with the onset of an economic crisis.

Lawrence said in a 2012 interview with the non-profit Council on Tall Buildings and Urban Habitat that he had looked as far back as the late 1800s and found correlations between the completion of the world’s tallest…

2022-04-08 01:21:00

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