Recession Watch: Dr. John Rutledge and the Best Metric

Today’s developments on our "Recession Watch," where we try to monitor a range of indicators in an open-minded fashion.

Durable goods orders for August showed an expected decline.  This is important since business spending is expected to pick up the slack if and when we finally see declining consumer spending.  It is only one month, but it bears watching.

Tony Crescenzi, a favorite source from notes widening credit spreads, but interprets this as a credit market prediction of a slowing economy, not a "deep, lasting retrenchment."

Most useful of all is this insight from the Dr. John Rutledge Blog.  Whatever one thinks of other government statistics, actual tax collections do not overstate economic growth.

Link: Forget the Slowdown Talk: State Tax Receipts Soaring.

Slowdown? What slowdown? Tax collections are the best metric for economic growth. You only pay them when you make money. You have to pay them or federal agents will enter your house with a gun. Not much room for statistical error there. As you can see …

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