Where are we in relation to a recession?
Recession Score
51
Caution
▼ 15 from 66 on 9 June 2026
The faded arrow shows where the dial sat then.
9 of 13 pre-recession indicators have triggered, 4 have not, unchanged since June. Both of the concerns flagged last time have reversed. CPI year on year fell from 3.78% to 3.30% in July, and real personal income has risen three months running after four months of falls. The Sahm Rule has gone negative at -0.03%. Retail sales, corporate profits and the S&P 500 all set fresh records.
Last updated 27 August 2026
Monthly Change · June to August 2026
Both of June's concerns have reversed. Nothing moved towards recession.
Signals that eased
- ▼ CPI year on year fell to 3.30% in July, down from 3.78% in April. The single concern named in June has reversed.
- ▼ Real personal income excluding transfers rose to $16,614.7B in July, climbing three months running after four months of falls. June's other named concern has also reversed.
- ▼ The Sahm Rule turned negative at -0.03% in July, down from 0.10%, further below the 0.50% trigger.
- ▼ Corporate profits rose to $5,208.4B in Q2 2026 from $4,753.4B, about 9.6% on the quarter and another record.
- ▼ Real retail sales set a fresh record at $229,439M in July.
- ▼ The S&P 500 traded around 7,676 in late August, up from about 7,406 in June. Still no cyclical top.
- ▼ Unemployment eased to 4.1% in July from 4.3%.
- ▼ Industrial production reached 102.99 in July, a new high.
Signals worth watching
- ▲ The smoothed recession probability ticked up to 0.60% in June from 0.44%. Still nowhere near the 5% danger zone, and noted for completeness rather than as a warning.
- ▲ Housing permits dipped to 1,374K in June before recovering to 1,433K in July. The trend is intact but it is no longer a clean climb.
Bottom line. Nothing moved towards recession in the last ten weeks. No new pre-recession indicator triggered, and the two things flagged in June as live concerns have both turned around: inflation is back down and real incomes are rising again. Records continue in retail sales, corporate profits and equities, and unemployment eased rather than worsened. Inflation is still above target, which limits how far the Fed can keep easing, and that remains the thing worth watching.
Recession Theories
TXMC Sequence
Pre-Recession11 of 31 sequence steps complete
11 of 31 sequence steps complete, 9 of the 13 pre-recession steps, none currently ambiguous. No new step has triggered since June.
H.O.P.E Cycle
3 of 4 decliningH
O
P
E
Mixed but improving. Housing rebounding, profits and sales at record highs, orders still the lone soft spot.
ClearBridge Anatomy
12 of 12 greenClearBridge's Recession Risk Dashboard reads a full expansionary green as of the June 2026 update, with all 12 indicators signalling green. Profit Margins and Job Sentiment were the most recent to turn, Job Sentiment on a record jump in 'jobs plentiful' responses.
Standalone Indicators
What to Look For Next
The next dominoes
These indicators haven't triggered yet. When they do, the sequence progresses closer to recession.
Earnings Peak
Corporate profits at a new record of $4,719.7B in Q1 2026, up from $4,538.6B in Q4 2025. No earnings peak.
Market High
S&P 500 around 7,406 in early June 2026, fresh record highs after a 7,584 intraday peak. No cyclical top.
Industrial Production Peak
Industrial production rebounded to 102.5 in April 2026, back above February. No confirmed peak.
Key Metrics to Watch
Yield Curve Revert
Uninverted September 2024. Currently +0.47%.
Tightening Ends
Fed began cutting September 2024. Rate at 3.63%, easing still paused.
Stock Market Top
S&P 500 around 7,676 in late August, fresh record highs. No cyclical top.
CPI Reaccelerating
CPI year on year fell to 3.30% in July from 3.78% in April. The reacceleration has reversed.
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