Construction trends can predict yield curve inversions – St Louis Fed
Housebuilding expectations should be considered when forecasting economic activity, researchers say
A fall in planned housing construction can be used to predict a yield curve inversion and subsequent recession, researchers from the Federal Reserve Bank of St Louis find.
In two economic letters, the researchers examine a number of variables that have traditionally been used to predict recessions, such as manufacturing and construction employment. They also examine the expected housebuilding activity.
They plot the trends in these variables against yield curve inversions to analyse which one
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