U.S. Recession Risk Dashboard

The current recession tape remains a watch condition, not a base-case contraction. The cleanest takeaway is that the most market-sensitive measures have moved away from spring stress while the labor market is no longer hot enough to ignore. PortfolioAI's recession read assigns a low 3-month risk, a low-to-moderate 6-month risk, and a moderate 12-month risk that depends on whether unemployment keeps drifting higher into year-end.

The recession debate has shifted from imminent contraction to late-cycle durability. That distinction matters for portfolio construction. A true recession setup would usually show a reinforcing pattern: rising unemployment, widening credit stress, falling output, deteriorating market breadth, and consumer anxiety climbing together. Today's mix is more uneven. Labor is softer, but not broken. Credit pressure has eased. Search interest for recession has cooled. Prediction markets are not paying investors to treat a downturn as the central path.

For the next quarter, the practical stance is to avoid over-hedging a recession that the data does not yet confirm. Quality cyclicals, infrastructure beneficiaries, select industrials, and balance-sheet-rich technology can still work if growth remains slow but positive. For six to twelve months, however, the watch list should stay focused on labor-sensitive and credit-sensitive exposure: regional banks, lower-income consumer discretionary, freight, staffing, and highly levered small caps would be the first groups to show a macro downgrade.

The actionable threshold is straightforward: if the Sahm measure accelerates toward 0.50, unemployment resumes a persistent climb, and credit stress turns higher at the same time, the dashboard should move from soft-landing posture to defensive recession positioning. Until then, the evidence favors a cautious expansion rather than a recession call.