ORLANDO Fla. — If you really want to know what the economy is going to do keep an eye on sales of wine, beer and cigarettes, advised Mike Schenck, vice president of economics and statistics for CUNA to attendees here at the Florida Credit Union League’s 2007 Annual Convention and Exposition.

Schenk was painting a larger picture, of course–that one of the usual predictors of a recession–an inverted yield curve (the difference between short and long term rates) has historically signaled a downturn. But that hasn’t happened yet. “An inversion usually signals a recession and we’ve never had one without an inverted yield curve. But correlation doesn’t imply causation,” said Schenk. “So the short answer is, no, I think we’ll avoid one. But there is a correlation between consumer confidence and sales of wine, beer and cigarettes,” he noted.

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