An interesting article appeared in today’s Wall Street Journal about the chances of a double-dip recession. The U.S. economy may be slowing down, but this article lists seven reasons why it isn’t heading for a double dip recession.

1. The Consumer Seems Firm Enough
Retail sales dipped in May by 1.4%, but that follows a 10% advance in sales during the prior 12 months. Personal income rose at an annual rate of 5.4% in May, up slightly from the prior six months.

2. Housing Data are Misleading
Though the first-time home buyer tax credit has created an up and down pattern in the reporting of home sales, it is significant to note that the inventory of unsold homes has dropped from a 13 months’ supply during 2008-2009 to an eight months’ supply.

Home prices rose by 5.3% for the first four months of 2010 and continue to rise in May.

3. Business Spending and Exports are Awfully Strong for a Dip
Shipment of capital goods continues to be strong in 2010, exceeding the rate of growth of the 25% registered in the prior 12 months.

4. Overall Production Levels Look Fairly Good
Year-to-date through May 2010 has seen industrial production continue to rise at an annual rate of more than 8%.

5. Employment Does Not Look Threatening
We continue to see positive indicators on hours worked, temporary employment, and even in full-time employment in the current recovery. (Employment figures are considered a lagging not a forward-looking indicator.)

6. Financial Markets Are Healthier Than the Headlines Imply
Markets have demonstrated resilience to the recent sovereign debt problems as measured by the TED spread (the gap between Treasury bill and interbank lending rates.) This spread has only widened from 20 bps to 40 bps, a long way from 460 bps recorded in the 2008-2009 crisis.

7. China Continues to Grow
A slowdown in China is a reasonable expectation. Real estate prices are dropping and their currency is appreciating slightly. Still, China continues to grow at a 9.5% rate, down from an 11.9% in the first quarter.