Core Insights - The lack of federal statistics, particularly on employment and unemployment, is creating uncertainty in assessing the labor market and potential recession risks [2][3][4] - The Federal Reserve's decision to reduce rates is driven by concerns over a deteriorating labor market and slow job creation potentially leading to job contraction and recession [2][4] - Current recession indicators are not reliable due to significant fluctuations in labor supply and participation, complicating the interpretation of unemployment rate changes [5][6] Labor Market Analysis - There is a wealth of private sector data and surveys available, but the absence of core federal data limits confidence in labor market assessments [1][2] - The unemployment rate indicator is currently at 0.1%, well below the recession threshold of 0.5%, suggesting that the economy is not in a recession based on this metric [6] - Changes in labor supply, particularly due to immigration and labor force participation, have historically influenced unemployment rates, making it difficult to draw conclusions about recession status [5][6]

Group 1: Treasury Yields Overview - The yield on the 10-year Treasury note ended at 4.14% on September 19, 2025, while the 2-year note was at 3.57% and the 30-year note at 4.75% [1] - A long-term view of the 10-year yield shows significant historical context, starting from 1965, highlighting the impact of events like the 1973 oil embargo [2] - The inverted yield curve, where longer-term yields are lower than shorter-term ones, is a reliable leading indicator for recessions, with the 10-2 spread turning negative before recessions [2][3] Group 2: Recession Indicators - The average lead time to a recession based on the first negative spread date is approximately 48 weeks, while using the last positive spread date yields an average of 18.5 weeks [4][6] - The 10-3 month spread also indicates a lead time to recessions ranging from 34 to 69 weeks, with similar patterns observed as in the 10-2 spread [5] - The most recent negative spread for the 10-2 occurred from July 5, 2022, to August 26, 2024, while the 10-3 month spread was negative from October 25, 2022, to December 12, 2024 [3][5] Group 3: Mortgage Rates and Federal Funds Rate - The Federal Funds Rate influences borrowing costs for banks, which typically leads to higher mortgage rates when the FFR increases; however, recent trends show mortgage rates declining despite steady FFR [7] - The latest Freddie Mac survey reported the 30-year fixed mortgage rate at 6.35%, the lowest since October 2024 [7] Group 4: Market Behavior and Federal Reserve Influence - Federal Reserve policy has significantly influenced market behavior, particularly in relation to Treasury yields and the S&P 500 [8] - ETFs associated with Treasuries include Vanguard 0-3 Month Treasury Bill ETF (VBIL), Vanguard Intermediate-Term Treasury ETF (VGIT), and Vanguard Long-Term Treasury ETF (VGLT) [9]

Group 1: Initial Jobless Claims - Initial jobless claims for the week ending September 6th reached a seasonally adjusted level of 263,000, marking the highest level in nearly four years and an increase of 27,000 from the previous week, which is the largest weekly jump since last October [1] - The latest initial claims figure significantly exceeded the forecast of 235,000, indicating a potential shift in the labor market [1] - The four-week moving average of initial claims currently stands at 240,500, reflecting an increase of 9,750 from the previous week, which provides a smoother view of the overall trend [2] Group 2: Continuing Unemployment Claims - Continuing unemployment claims, which represent individuals who have filed for unemployment and continued to claim benefits, were at a seasonally adjusted level of 1,939,000 for the week ending August 30th, unchanged from the previous week and lower than the forecast of 1,950,000 [7] - Continuing claims have remained near multi-year highs for several months, indicating persistent challenges in the labor market [8] Group 3: Economic Indicators - The relationship between unemployment claims and recessions is highlighted, with the four-week moving average typically rising at or before the onset of a recession and peaking around its conclusion [3] - The extreme volatility of non-seasonally adjusted data necessitates the use of moving averages to better understand secular trends in unemployment claims [6]