Jeffrey Gundlach: 10 Troubling Economic Signs to Watch

4. Leading economic indicators look ominous.

“The leading economic indicators are now very recessionary,” and “the momentum continues to be gathering on the downside,” Gundlach said. “It looks to me like maybe we’re two months into a recession,” although more corroboration is needed, he added.

Gundlach cited various indicators suggesting a recession is near or perhaps here already.

The Purchasing Managers’ Index suggests “the recession’s going to start, like, today,” and the Institute for Supply Management’s New Orders Index also indicates “we’re very close to a recession,” Gundlach said.

The 2-year/10-year Treasury yield curve typically steepens before a recession, and that hasn’t happened yet, “so that’s one indicator that suggests the recession probably isn’t upon us now but is likely to be upon us sometime in the months ahead,” he said.

ISM manufacturing prices paid data do suggest that inflation will come down, he noted.

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