The Big Four Economic Indicators: Industrial Production and Real Retail Sales Advisor Perspectives

Doug Short

Research

24 Pages

This paper examines the four economic indicators most closely associated with U.S. recession dating and explains how they can help investors interpret the business cycle. Despite unusual income data caused by tax planning, three of the four indicators continued signaling expansion, with Industrial Production standing 19.2% above its 2009 trough.

Key Takeaways

Expansion Still Intact: Industrial Production rose for 4 consecutive months and reached 19.2% above its June 2009 recession low, reinforcing an ongoing expansion.
Retail Sales Strength: Real Retail Sales increased for 4 straight months, with the latest 3 marking new all time highs despite broader concerns over economic momentum.
Income Data Distortion: Real Personal Income Less Transfer Payments temporarily weakened because of late 2012 tax planning, making it the lone Big Four indicator signaling contraction.
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