As the bond market's yield curve flashes warning signs of a U.S. recession, some key economic indicators are offering more conflicting signals about the outlook.

Recent government and private data show weakness from housing to retail sales and consumer sentiment, prompting a more dovish tone from the Federal Reserve and pushing rates traders to price in a good chance of an interest-rate cut this year. The more downbeat signs also have economists cutting estimates of fourth-quarter gross domestic product and projecting a weaker start to this year.

At the same time, as data wrinkles are ironed out after a partial government shutdown delayed reports, a healthy American labor market with rising wages is propelling the economy toward the longest expansion on record.