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Cue relief: If there is a recession in 2020, it won’t come from the housing industry. The number of housing permits is up to roughly 1.5 million, which represents healthy, stable growth compared to the out-of-control permitting happening right before the Great Recession. But the housing industry is just one indicator of where the economy is going, and in order to get a better picture of the country’s economic future, it is best to take a holistic approach that factors in unemployment rates, consumer confidence, the stock market, and other traditional economic indicators. Fortune magazine analyzed these figures, and the outlook for the start of the new decade is neither stellar nor alarming. But it could pay off to exercise a bit of caution—a majority of the indicators are slowing down or keeping steady, which can signal the start of a downturn.
We are living in the longest economic expansion in American history. When the last recession hit in December 2007, most of us still had flip phones and hadn't yet created a social media presence. And many younger workers today have no clue what a downturn looks like. Case in point: Justin Bieber was 15 when the Great Recession ended in the summer of 2009.
But the hard truth is the good times are going to end—the only question is, When?
Some economic signals are already flashing yellow or even red. In August the U.S. yield curve temporarily inverted—long seen as a recession precursor. And in the final months of 2019, the U.S. manufacturing sector started to contract. Then again, the economy is still hitting some high notes, like rising building permits and a strong holiday shopping season.
To get an indication of where the economy is headed in the early months of 2020, Fortune pulled nine top economic indicators. We looked at both leading economic indicators like new building permits and the purchasing manager index, along with core economic stats like GDP and the unemployment rate. Taken together they can give investors a sense of where things are today—and where they might be headed.
