Reasons to worry about a recession are piling up: the Federal Reserve's inflation fight, a slowing housing market, warnings from retailers and venture capitalists and a smattering of layoff announcements. But one part of the labor market is sending a decidedly different signal. Goods-producing employment, which includes industries like manufacturing, construction and oil and gas extraction — is accelerating rather than slowing as it has in previous recessions.
There are a couple of ways this could play out. If the industrial part of the economy powers ahead while other segments pull back, it could simply represent a shift in activity as the Fed brings inflation under control. The second possibility is that the industrial strength forces the Fed to keep raising interest rates to the point that the economy veers into a recession, mild or otherwise.