Anatomy of a Recession
ClearBridge Investments' recession assessment tool, created by Investment Strategist Jeffrey Schulze. Monitors 12 economic indicators monthly across consumer, business, and financial sectors.
Consumer
Household spending, employment, and housing activity
Business Activity
Manufacturing, shipping, and corporate profitability
Financial
Credit conditions, money supply, and bond markets
About this framework
ClearBridge Investments (part of Franklin Templeton) developed this analytical tool to assess U.S. recession risk. Investment Strategist Jeffrey Schulze reviews the 12 indicators monthly, assigning each a traffic light status based on whether the data points towards expansion, neutral conditions, or recession.
The framework covers the economy comprehensively across three pillars: consumer activity (housing, jobs, retail, wages), business conditions (manufacturing, shipping, profits), and financial markets (credit, money supply, yield curve). When the majority of indicators turn red, the framework signals that recession is approaching.