TXMC Recession Sequence
A 31-step sequence tracking the chronological order economic indicators typically fire before, during, and after a recession. Based on historical patterns from the 1920s onwards.
Progress
11/31
Current Phase
Pre-Recession
Pre-Recession
Leading indicators that fire before a recession begins
New Orders Peak
ISM New Orders peaked February 2021. Currently 47.7, in contraction.
Triggered: 2021-02
PMI Peak
ISM Manufacturing PMI peaked January 2021. DBnomics data unreliable, awaiting verification.
Triggered: 2021-01
Housing Permits Peak
Housing permits peaked December 2022. Currently 1,423K in April 2026, rebounding from an August 2025 low of 1,330K.
Triggered: 2022-12
Yield Curve Inversion
Yield curve inverted July 2022. Has since uninverted (currently +0.41%, flattened from +0.55%).
Triggered: 2022-07
Unemployment Off Low
Unemployment left its 3.4% low in July 2023. Steady at 4.3% in May, off the November 2025 high of 4.5%.
Triggered: 2023-07
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.
Tightening Ends
Fed Funds Rate peaked at 5.33% in July 2023. Currently 3.63%, easing all but paused.
Triggered: 2023-07
Industrial Production Peak
Industrial production rebounded to 102.5 in April 2026, back above February. No confirmed peak.
CPI YoY Peak
CPI year on year peaked at 9.1% in June 2022. Currently 3.78%, reaccelerating from 3.29% a month ago.
Triggered: 2022-06
New Orders Contraction
ISM New Orders below 50 (contraction). Currently 47.7.
Triggered: 2022-01
PMI Contraction
ISM PMI fell below 50 in November 2022. Latest reading unverified due to DBnomics data issue.
Triggered: 2022-11
Real Sales Peak
Real retail sales reached a record $227,758M in April 2026, above the August 2025 high of $226,329M. No peak.
Recession
What happens during the downturn
Recession Starts
No recession declared by NBER.
Yield Curve Uninverts
Yield curve returned to positive in September 2024. Currently +0.41%.
Triggered: 2024-09
Real Income Peak
Real personal income (ex transfers) at $16,525.8B in April 2026, down four months running from a January peak of $16,670.5B. Rolling over but no confirmed peak.
Easing Starts
Fed began cutting rates September 2024. Rate now stable at 3.63%.
Triggered: 2024-09
New Orders Trough
ISM New Orders at 47.7. Still in contraction, no clear trough.
Market Low
S&P 500 at fresh records around 7,406. Nowhere near a cyclical low.
PMI Trough
ISM PMI data unreliable from DBnomics. Cannot determine trough.
Housing Permits Trough
Housing permits at 1,423K in April 2026, up from the August 2025 low of 1,330K. The trough looks increasingly in.
Industrial Production Trough
Industrial production rebounded to 102.5 in April. No trough.
Recovery
Signs the recession is ending
Recession Ends
No recession to end.
Real Sales Trough
Real retail sales at a record $227,758M in April. No trough.
Real Income Trough
Real income easing four months from its January peak. No contraction.
Unemployment High
Unemployment at 4.3%, off the November 2025 high of 4.5%. 4.5% could be the peak but unconfirmed.
Easing Ends
Fed Funds stable at 3.63%. Easing may have paused but not officially ended.
Earnings Trough
Corporate profits at a new record. Not in a recession context.
New Orders Contraction Ends
ISM New Orders still below 50. Contraction continues.
PMI Contraction Ends
ISM PMI data unreliable. Cannot assess.
CPI YoY Trough
CPI YoY at 3.78%, reaccelerating. No deflationary trough.
About this framework
TXMC (also known as Alpha Beta Soup) is a macro commentator who developed this recession sequence model by analysing historical data from the 1920s onwards. The framework tracks economic indicators in the chronological order they typically fire during a recession cycle.
The sequence follows a predictable pattern: monetary tightening leads to peaking orders and PMI, which leads to yield curve inversion, rising unemployment, peaking industrial production and CPI, then tightening ends, new orders contract, real sales peak, and recession begins.
Each recession is unique, but this sequence represents the historical norm. The value is in tracking progress through the sequence to understand where we are in the cycle, not in predicting exact timing.