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What do economists watch for signs of a recession?

What do economists watch for signs of a recession?

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The most commonly cited indicator of a weakening economy is weekly first-time applications for unemployment benefits. People are eligible for the benefits if they've been laid off or have lost a job through no fault of their own. So a rising pace of applications suggests that companies are cutting jobs.

Last week, first-time applications amounted to 209,000, a very low level historically.

The Institute for Supply Management's survey of manufacturers is another important gauge. Lately, it is showing that factory activity has been slowing and is near the level that indicates it is shrinking. Manufacturing makes up a relatively small part of the economy but is more sensitive to downturns than services. That's because people cut back on car-buying and other large purchases when they feel economically squeezed.

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