Evidence strongly points to an approaching recession
✅
Leading Indicators
These indicators are the ones that either are designed to, or historically have, popped off before a recession. They are the canaries in the macro coal mine.
| Indicator/ Framework | Status | Recession? |
|---|---|---|
| TXMC | Bias towards recession | ✅ |
| H.O.P.E | Strongly predicts upcoming recession | ✅ |
| The Leading Economic Indicator | Potential recession on horizon | ✅ |
| The Anatomy of a Recession | Strongly Predicts upcoming recession | ✅ |
Coincident Indicators
These indicators attempt to spot the recession as it’s happening. They aren’t much use at predicting an upcoming one, but have a track record of knowing we’re in one before the officials confirm it.
| Indicator/ Framework | Status | Recession? |
|---|---|---|
| Sahm Rule | Potential recession on horizon | ➖ |
| GDP-Based Recession Indicator Index | No indication of recession | ❌ |
Lagging Indicators
These indicators use data that literally ‘lags’ behind, and for that reason are only much good at confirming we have had a recession.
| Indicator/ framework | Status | Recession? |
|---|---|---|
| Smoothed U.S Recession Probabilities Indicator | No indication of recession | ❌ |
| NBER | No indication of recession | ❌ |
What are you looking at here?
The dashboard is a collection of the best indicators known to man and woman for reviewing whether the USA (and therefore, most likely, the western world) are heading towards, or are in, a recession.
Each one has been created by very smart people and while they all seem to have some merit, each tells a slightly different story.
It’s one of the reasons predicting – nay, pinpointing – a recession is so difficult.
We’ve gathered them all here as a ‘meta’ view of the expert opinion and data. The wisdom is in the crowd.
There’s a key:
✅ This indicator is predicting a recession.
➖ This indicator is as yet inconclusive.
❌ This indicator does not show signs of a recession.
Each indicator, framework and methodology has it’s own way of looking at different macro-economic data. You can learn about each one by clicking through.
What we’re watching:
We’re keeping a close eye on the leader indicators (things that typically happen before a recession begins), and they are almost all pointing towards a recession. Only a few are left to pop. We’re vigilantly watching:
✅ Yield curve reverts
Watching for the Yield curve to REVERT BACK TO NORMAL. The yield curve nearly always reverts to normal before a recession begins.
✅ Tightening Ends
We’re looking for a signal that interest rates have STOPPED rising. Recessions don’t start until interest rates come down from their high.
✅ Stock Market tops
A confirmation that the stock market TOP is in. Recessions cause stock markets to fall.
✅ Sales Peaking
We’re looking to see if Real Sales start to roll over and DECLINE. It is persistently high. A turn downwards would further indicate a recession.
Remember to sign up
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