Fears have grown in recent months amid a persistent trade war with China, pullbacks in corporate hiring and investment and a manufacturing sector that has already slipped into contraction.

The recession probability model developed by Bloomberg economists Eliza Winger, Yelena Shulyatyeva and Andrew Husby incorporates a range of data spanning economic conditions, financial markets and gauges of underlying stress.

The small reduction in the recession probability reflects an easing of financial-market conditions.

The spread between three-month and 10-year Treasury securities became less negative in September, before turning positive in October. That spread has inverted before each of the last seven recessions. At the same time, the S&P 500 Index has surged to record-high levels, cutting the odds of recession nearly in half since the stock rout seen in December….

Source: by…. Bloomberg