US Recession Dashboard May 2026
Macro stress gauges, crowd pricing, and search sentiment on contraction risk
Executive Summary
The US economy remains in a late-cycle expansion, not a contraction. Real GDP continues to advance, the Sahm Rule proxy sits at 0.13—far below its 0.50 recession trigger—and unemployment has stabilized near 4.3%. Financial conditions have rebounded from their spring 2026 trough, model-based recession odds stay in low single digits, and both Google search anxiety and Polymarket year-end recession pricing have eased further.
- 3 months: Low recession risk. Output and hiring show deceleration, not collapse. No Sahm trigger, no GDP contraction.
- 6 months: Low-to-moderate risk. Gradual labor slack, record money-market balances, and a modest GDP level dip warrant monitoring if layoffs accelerate.
- 12 months: Moderate tail risk. Polymarket prices a 19% chance of a US recession by year-end 2026—down from prior weeks but still a meaningful hedge scenario.
Sahm Rule proxy (monthly) vs Chicago Fed National Financial Conditions Index (weekly, sampled).
UNRATE (monthly) and NY Fed recession probability model (daily, %).
Real GDP, billions of chained 2017 dollars (quarterly).
Risk Table
| Indicator | Latest | Trend | Recession Read |
|---|---|---|---|
| Sahm Rule Proxy (SAHMCURRENT) | 0.13 (Apr 2026) | Easing | Well below the 0.50 trigger; labor cooling without disorderly layoffs. |
| Chicago Fed Financial Conditions (BCIG) | 8.3 (May 2026) | Improving | Rebounded from a 4.0 spring low; credit and equity stress have eased. |
| NY Fed Recession Model (RECPROUSM156N) | 1.82% (May 29, 2026) | Stable | Model-implied 12-month recession odds remain low in absolute terms. |
| Real GDP (GDPC1) | $24,152.7B (May 29, 2026) | Rising | No output contraction; a minor level dip from the prior print bears watching but is not recessionary. |
| Unemployment Rate (UNRATE) | 4.3% (Apr 2026) | Drifting up | Above 2023 trough but historically benign; acceleration above 4.5% would raise flags. |
| Money Market Fund Assets (MMMFFAQ027S) | $8.19T (Q3 2025) | Elevated | Defensive cash parking signals caution even as equities hold highs. |
| Google Search: “recession” (EN-US) | 2,439/day (May 28, 2026) | Fading | Down 36.7% vs 30 days ago and 69.6% vs one year ago; public anxiety off prior peaks. |
| Polymarket: US recession by end-2026 | 19% “Yes” | Compressing | Crowd-implied tail risk is falling; ~81% priced for no NBER recession this year. |
Professional Commentary & Outlook
The dashboard paints a familiar late-cycle picture: growth without euphoria. GDP has not rolled over, the Sahm Rule is inactive, and financial conditions have improved materially from the March–April compression when BCIG bottomed near 4.0. That trio is difficult to reconcile with an imminent recession call.
What distinguishes this week is the convergence of softer fear gauges. Polymarket’s year-end recession contract has drifted to 19%—the lowest implied probability in recent weeks—while daily Google searches for “recession” sit at 2,439, down sharply from spring highs. The NY Fed model, meanwhile, holds near 1.8%, reinforcing that econometric models and crowds are aligned on a soft-landing base case even as unemployment grinds slightly higher.
The residual risks are structural, not acute: money-market assets near $8.2 trillion signal investors keeping dry powder, and any sudden jump in initial claims above 250K would reprice recession hedges quickly. A shallow GDP level pullback from $24,175B to $24,153B is not a recession signal on its own, but it underscores that the expansion is maturing rather than accelerating.
Portfolio implications: maintain quality and liquidity while selectively adding cyclical exposure where earnings revisions are stabilizing. Defensive sectors—staples, utilities, healthcare—remain sensible ballast if labor data deteriorates. Trim highly leveraged consumer and commercial real estate if unemployment pushes above 4.5%.
Scenarios:
- Base case (58%): Slow growth, contained unemployment, no NBER recession in 2026.
- Bear case (22%): Credit tightening or geopolitical shock pushes unemployment above 5% and activates Sahm Rule dynamics.
- Bull case (20%): Disinflation plus stable hiring extend the expansion; recession odds compress toward single digits.
Sources: FRED-aligned series (SAHMCURRENT, BCIG, RECPROUSM156N, GDPC1, UNRATE, MMMFFAQ027S); DailySearchVolume.com; Polymarket US recession by end-2026 contract.