Your Money: Economic indicators not all pointing to recession

Is a recession likely? There are conflicting signals.

The government might try to bleed more liquidity into the U.S. financial system, but who knows if that will trickle down to the common folk. The first two QEs (quantitative easings) didn't help much.

"It's increasingly apparent to us that the policy options are limited and economic growth is slowing down," Pacific Investment Management Co. (PIMCO) bond-fund guru Bill Gross said Friday.

And the question isn't whether there's a recession in corporate profits; those have been great. It's the U.S. economy at large that investors are worried about.

So where can investors hide? Gross, for one, told Reuters that a recession is at hand, and as the country's largest bond-fund manager, his shop, which manages more than $1 trillion in assets, continues hiding out in Treasurys - at least for the moment.

But the decline in Treasury yields to 60-year lows reflects a high probability of recession in the United States, Gross says. The yield on the benchmark 10-year U.S. Treasury note dropped to 1.98 percent at one point last week.

So what are the conflicting signals? It seems inflation is picking up, and that could spur economic growth, and wages have started to recover. Inflation usually isn't in the calculus of investors until unit labor costs start to rise, and they have.

Here are some of the important economic numbers worth watching:

The cost of living. In the United States, the cost of living climbed more than forecast in July, and that's bad news for Federal Reserve Chairman Ben S. Bernanke, who has been trying to persuade colleagues at the central bank to spur growth, particularly after manufacturing data in the Philadelphia region plunged in August.

The Philly Fed numbers are especially influential among Fed bankers. The Philly Fed's general economic index dropped to minus 30.7 in August, the lowest since March 2009.

The Consumer Price Index. The CPI increased 0.5 percent from June, more than twice the 0.2 percent median forecast of economists, figures from the Labor Department in Washington revealed.

Consumer prices were pushed up by explosive costs for fuel (those have since retreated) and by an increase in food costs. Excluding energy and food, the so-called core inflation gauge rose 0.2 percent, pushing the increase over this last year to 1.8 percent. That's the biggest 12-month gain in more than a year, according to Labor Department data.

Wages. Wages are percolating, and that's the biggest cost for businesses. Unit labor costs for nonfarm businesses rose 1.3 percent in the quarter ended June 30 compared with a year ago, as hourly compensation increased while productivity dropped, Bureau of Labor Statistics data show.

Still, consumer confidence fell in August to the lowest level since March 2009, which could further hamper spending.

Gold pushed toward $1,900 an ounce last week as investors sought safe havens in the precious metals and in U.S. Treasury bills and bonds.

But is gold nearing a short-term correction? The exchanges where you can trade gold are starting to require more collateral from investors. There's more speculative demand, and therefore the regulators believe they should step in and boost the requirements to invest with borrowed money.

CME Group Inc. (CME), the largest futures market, hiked margins on gold contracts - that is, the minimum amount of cash speculators must keep on deposit. The minimum amount of cash that investors must keep on deposit for an initial account increased to $7,425 on a 100-ounce contract, up from $6,075.

Gold is up almost 25 percent this year alone, heading for an 11th straight annual gain.

For the traders out there, it might be time to take profits.

That doesn't mean the secular bull market in gold is over, just taking a breather. Proof that gold could continue to climb? Even the socialists out there want gold in their safes.

Venezuelan President Hugo Chavez has ordered his central bank to repatriate $11 billion of gold reserves held in developed nations' institutions, such as the Bank of England. Venezuela holds 211 tons of its 365 tons of gold reserves in U.S., European, and Canadian bank vaults, and now Chavez wants to return the bars to his central bank.