The NASDAQ's disastrous January has been balanced by a strong February, up almost 9% since the recovery indicators were published last month. (click to enlarge)

The rate of new orders for manufacturing businesses bounced back, probably as some built-up inventories from the prior month were worked down. Not all of the recovery indicators rebounded, however. ISM Manufacturing imports were flat. The overall ISM Non-manufacturing Index fell to a four-year low. We prefer to track the non-manufacturing new orders series. Though that increased slightly, it still remains below the start of the recession in December 2007. Non-manufacturing imports decreased, and is almost 7% below the recession start level. With the GDP revisions issued last week, there was a slight increase to the Q4-2013 report of proprietors income, our measure of small business activity, but it still fell below Q3-2014 levels by a slight margin. We remain concerned about the overall strength of the economy and expect many forecasts made by financial institutions to be rolled back somewhat. While the risk of recession is higher when growth rates are low, we expect the sluggishness to continue, with the economy growing in the +1.0% to +1.5% range. Would a recession surprise us? No. Would rapid growth in the economy at 3.0% or more surprise us? Yes, definitely. We'd prefer to be surprised. It's not likely. # # #