Analysts at the Federal Reserve Bank of Cleveland used the yield curve to estimate the probability of the economy will return to recession by next September is now 2.9%, down significantly from an 18.5% chance previously. Last week, the National Bureau of Economic Research announced the recession of the past few years is over, reaching its trough in June 2009. The Cleveland Fed analysts said although the numbers aren't strictly comparable, the decreased chance for another recession a year from now implies 12 months of "nonrecession data (as declared by the NBER), rather than any massive improvement in the economy." Joseph Haubrich, vice president at the Cleveland Fed, and research assistant Timothy Bianco used past values of spread in the yield curve and GDP growth to project real GDP growth will be about 1% over the next year, which "comes in on the more pessimistic side of other forecasts, although, like them, it does show moderate growth for the year." A flat curve normally indicates weak growth, while a steep curve shows strong growth. Analysts said one measure of slope -- the spread between 10-year Treasury bonds and three-month Treasury bills – corroborates this inversion. And it's especially true "when GDP growth is lagged a year to line up growth with the spread that predicts it." "While we can use the yield curve to predict whether future GDP growth will be above or below average, it does not do so well in predicting an actual number, especially in the case of recessions," the analysts said. "Alternatively, we can employ features of the yield curve to predict whether or not the economy will be in a recession at a given point in the future. Typically, we calculate and post the probability of recession one year forward." Write to Jason Philyaw.