Basis point (bp)

One hundredth of a percentage point. A yield moving from 4.00% to 4.25% is a 25bp rise.

Building permits

Authorisations to start new homes. Permits fall before construction slows, which makes them an early warning of housing-led downturns.

Case-Shiller index

The S&P CoreLogic Case-Shiller index of US home prices, based on repeat sales of the same homes.

Composite score

This site’s 0–100 health reading for an economy, averaged from its recession signals. Higher is healthier. See the methodology for the formula.

Consumer Price Index (CPI)

The price of a fixed basket of goods and services bought by households. Its year-over-year change is the headline inflation rate.

Core CPI

CPI excluding food and energy, whose prices swing sharply. Used to read the underlying inflation trend.

Credit spread

The extra yield investors demand to hold corporate bonds instead of government bonds. Wider spreads mean more perceived risk.

Economic weather

A one-line daily summary of an economy’s overall conditions, written from the current data.

Federal funds rate

The overnight interest rate US banks charge each other, steered by the Federal Reserve. It is the US policy rate.

FOMC

Federal Open Market Committee: the Federal Reserve body that sets US interest rates, at eight scheduled meetings a year.

GDP

Gross domestic product: the total value of goods and services an economy produces. Real GDP is adjusted for inflation.

GDP growth (QoQ annualised)

The US convention for quarterly growth: the change from the previous quarter, scaled up to an annual rate.

Global median

The middle value across all tracked economies. Half of economies are above it and half below, so one large economy can’t dominate it.

High-yield (junk) spread

The credit spread on bonds rated below investment grade. It widens quickly when investors fear defaults.

Initial jobless claims

New applications for US unemployment benefits, published every Thursday. A rising trend is an early sign of layoffs.

Inversion

When short-term interest rates are higher than long-term rates. Historically, an inverted yield curve has preceded most US recessions.

Leaders & laggards

The best- and worst-performing markets or sectors on the day.

MoM / QoQ / YoY

Month-over-month, quarter-over-quarter and year-over-year: the period a change is measured over.

Nonfarm payrolls

The monthly count of US jobs added or lost outside agriculture, published on the first Friday of most months.

PCE price index

Personal Consumption Expenditures prices: the Federal Reserve’s preferred inflation gauge. It covers a broader basket than CPI.

Percentage point (pp)

The arithmetic difference between two percentages. Unemployment rising from 4.0% to 4.5% is a 0.5pp rise.

Policy rate

The main interest rate a central bank sets to steer borrowing costs and inflation.

Recession signal

One of seven indicators with a published threshold that has historically flagged recessions. A signal trips when it crosses its threshold.

Regime

The label for the composite score: expansion (75+), caution (40–74) or recession (below 40).

S&P 500 sectors

The eleven industry groups of the S&P 500, such as technology, financials and energy. Here they are tracked through the SPDR Select Sector ETFs.

Sahm Rule

A recession signal devised by economist Claudia Sahm. It trips when the 3-month average unemployment rate rises 0.50pp above its low of the previous 12 months.

Trade-weighted dollar

The US dollar’s value against a basket of the currencies of major trading partners.

Treasury yield

The interest rate on US government debt of a given maturity, such as 2-year or 10-year.

Unemployment rate (U-3)

The share of the labour force without a job and actively looking for one. It is the headline US rate.

VIX

An index of expected S&P 500 volatility over the next 30 days, derived from options prices. Often called the market’s “fear gauge”.

Yield curve

Treasury yields plotted across maturities. Here it is read through two spreads: 10-year minus 2-year, and 10-year minus 3-month.

For how these feed into the composite score, see the methodology.