NEW YORK (CNN/Money) - The two big economic stories of the past two days speak powerfully to the chief question hanging over the markets: Are we heading for a double-dip recession? I can't answer that question. But I can point out what the main economic signals are flashing right now -- in a word, danger.

First, let's clear up some misconceptions about the latest report on gross domestic product (GDP), released Wednesday. The news wasn't pretty, and a lot of chatter after the release bordered on outrage ("how dare the government tell us now that we didn't have just one quarter of negative growth last year -- we had three, a sure sign of recession!")

Baloney! It's true that journalists, pundits, and even many economists commonly define a recession as two quarters of negative GDP growth. But the official definition from the National Bureau of Economic Research (NBER) is the one that really counts: "A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale and retail sales."

Notice, it says nothing about GDP, and the big revisions issued on Wednesday underscore why: The GDP is subject to sizable revisions. It happens frequently and no one can wait for a year or two to figure out what's going on in the business cycle. Also, recessions don't start or end in quarters but in months. The start of the recession is simply the moment when the economy reaches a peak, when it stalls out, and starts losing some ground.

Notice too what NBER does focus on: industrial production, employment, real income, and wholesale and retail sales. Those are the indicators to watch now -- and that's the problem. Industrial production has been growing all year, from January to June, but now that growth is in question because a high-profile survey of manufacturing hit a big air pocket in July. I'm talking of course about the Institute of Supply Management's Index (ISM), which fell to 50.5 in July (see more). The key level is 50: above 50 manufacturing is growing, but if it slips below that level it's shrinking.

The ISM index has a strong correlation with manufacturing and often tends to lead it. So if the ISM keeps heading south, that could mean that one of the four pillars of economic recovery is crumbling.

Which leads us to Friday and the coming July employment report, another one of the NBER's four main indicators. If the jobs report disappoints, it will raise a big question about another pillar of the recovery.

The worry and hope all year has been the consumer. If people keep spending, the economy will stay on track. But the longer stocks stay in the tank, the more the worry grows that consumers will pull back on spending. Is the pullback in orders in the ISM survey a sign that people are doing just that, and that companies are responding? Will we find out that the stock market didn't disconnect from the economy? That instead it was telling us all along that the economy was losing steam?

A lot of folks have been making that argument. And worries of a possible double-dip recession are growing. We see a dark cloud over manufacturing. We see the economy struggling to create new jobs. Pick whichever forecast squares best with your sense of economic and financial reality. And then watch the numbers that count.

Kathleen Hays co-anchors Money & Markets, airing Monday to Friday on CNNfn, and appears throughout the day reporting on the economy and how it affects financial markets. As part of CNN's Business News team, she is also a regular contributor to Lou Dobbs Moneyline.