Oil prices are an 'underappreciated' indicator of a coming recession - and they're flashing signs the US will avoid a downturn

• Falling oil prices are a sign the US could sidestep a recession in the near term, DataTrek said.
• That's because cheaper crude means cheaper gas prices, a major bill for most Americans. 
• "The risk of a recession over the near term seems quite low," DataTrek cofounder Nicholas Colas said.

Oil prices are an indicator of an incoming recession – and they're flashing signs that the US will avoid a downturn, according to DataTrek.

"Lower energy prices are an underappreciated counterweight to the manifold arguments for an upcoming US/global recession. Aside from the Pandemic Crisis, every US recession since 1973 has been presaged by a doubling of oil prices over a year's time," DataTrek cofounder Nicholas Colas said in a note on Tuesday. "On top of that, periods of economic expansion coincide with stable or (at worst) predictably rising crude prices."