There has certainly been no shortage of angst about the economy in recent months. The ISM indexes for February certainly don’t justify that angst. The manufacturing number is softer, to be sure:

But it is nowhere near being in recessionary territory or, for that matter, even nowhere near matching the levels seen in the 2015-16 soft patch. The service sector side of the economy reveals even less cause to worry:

Services are a much larger portion of the economy than manufacturing. We have many cyclical indicators of the latter, but if manufacturing is less important than the past then weighing those indicators too heavily in our analysis will only lead to an unjustified bias toward recession calls. This is what happened in 2015-16 when the threatened recession failed to materialize.

Also, don’t be fooled into thinking this is “lagging” data. It’s just a couple of weeks old and realistically, if this recessionary slowdown started in the fourth quarter, this ISM data should be much weaker already.

Bottom Line: Be careful with some of the old tricks as they are likely less relevant in the new economy.