Why one popular recession signal is flashing a false positive, Goldman Sachs says

• Gross domestic income appears weak, which can indicate a recession may be near, Goldman Sachs said.
• But the data GDI is based on needs revision, the bank noted. 
• If revised, it would likely show the US economy is growing "above potential." 

Falling gross domestic income can often be a signal that precedes a recession, but this time around, the metric's decline is likely a statistical illusion, Goldman Sachs wrote in a weekend note.

In the third quarter of 2023, GDI slid 0.1% year-over-year. The decline takes the GDP-to-GDI spread to its highest level in three decades, fueling doubt in how resilient the US economy really is.