According to commentary that appeared in the Lombardi Letter, an economic recession is likely should a particular key indicator continue its descent. The article is referring to “stalling C&I loans” which, according to the author, have “flawlessly predicted the last eight U.S. recessions since 1960.”

The article says the absence of meaningful C&I loan growth over the past seven or eight months is an indicator. As for a cause, the article suggests that turmoil in the retail sector and related store closings is having a negative impact on C&I loan growth.

An analysis of data provided by the FDIC bears out the premise, i.e., over the last 15 months, the C&I loan balances for all commercial banks since year-end 2015, was up a paltry 1.34% from $1,868 billion to $1,893 billion as of March 31, 2017.

In an end note, the article says the last three recessions are a testament to the notion that the lack of commercial bank loan creation has accurately signaled the onset of a recession because they were largely fueled by debt.