U.S. Recession Analysis Report
Macro dashboard built from Sahm Rule proxy, conference board leading indicator proxy, recession probability model, real GDP, unemployment, money market fund assets, recession search interest, and prediction-market odds.
Current hard data does not point to imminent recession. Sahm proxy remains well below classic stress levels and the modeled recession probability series is near zero.
Labor softening and elevated recession-related search activity suggest caution, but unemployment and GDP trends are not yet confirming a recession regime.
Prediction markets imply roughly 29% to 31% recession odds in 2026, which is elevated but still below a majority-probability recession call.
Executive Summary
- The recession dashboard is sending a mixed but not fully recessionary signal.
- Sahm Rule proxy sits near 0.27, far below the classic 0.50 trigger often associated with recession onset.
- Unemployment has drifted up to about 4.4%, indicating cooling labor conditions but not acute stress.
- Recession model probability is around 0.8%, which is very low on an absolute basis.
- Recession search interest is elevated, with recent daily volume at 3,472 and average monthly volume of 311,296, indicating heightened public concern.
- Prediction markets are materially more cautious than hard data, pricing about 29% to 31% odds of a U.S. recession in 2026.
- Real GDP remains higher than five years ago and money market fund assets continue to rise, consistent with defensive positioning rather than outright collapse.
Current Indicator Snapshot
| Sahm Rule Proxy | 0.27 | Low Risk |
|---|---|---|
| BCIG Weekly | 9.2 | Watch |
| Recession Probability Model | 0.8% | Low Risk |
| Real GDP Proxy Level | 24,066 | Expansionary |
| Unemployment Rate | 4.4% | Cooling |
| Money Market Fund Assets | $7.77T | Defensive Positioning |
| Daily Search Volume | 3,472 | Concern Elevated |
| Polymarket Odds | 29%–31% | Meaningful Risk |
Labor Stress Signals
Probability & Market-Implied Risk
Growth, Liquidity & Public Concern
Risk Table
| Indicator | Latest | Trend | Interpretation | Signal |
|---|---|---|---|---|
| SAHMCURRENT | 0.27 | Below 0.50 threshold | Labor market deterioration is present but not yet recession-confirming. | Low |
| BCIG | 9.2 | Recovered from 2023 lows, softer than peak 2024 levels | Suggests the economy is slowing rather than collapsing. | Moderate |
| RECPROUSM156N | 0.8% | Very low absolute probability | Model-based recession risk remains subdued. | Low |
| GDPC1 | 24,066 | Up from ~21,082 in 2021 | Real output level remains expansionary. | Low |
| UNRATE | 4.4% | Up from cycle lows near 3.4%–3.5% | Labor market is cooling and deserves monitoring. | Moderate |
| MMMFFAQ027S | $7.77T | Strong upward trend | Cash parking behavior implies cautious positioning. | Moderate |
| Recession Search Volume | 3,472 daily / 311,296 avg monthly | Elevated public interest | Sentiment and concern are elevated, often ahead of softer data. | Moderate |
| Polymarket Recession Odds | 29%–31% | Elevated vs hard-data models | Markets see material downside risk over the next year. | Moderate |
Professional Commentary & Outlook
The highest-conviction takeaway is that the U.S. economy appears to be in a late-cycle slowdown rather than an already-active recession. The labor market has softened enough to keep recession discussions alive, but not enough to trigger a classic Sahm-style warning. Likewise, the formal recession probability series remains extremely low, which argues against an imminent contraction.
That said, soft signals are no longer benign. Recession-related search activity is elevated, and prediction markets are pricing a non-trivial chance of downturn this year. Rising money market fund balances reinforce the view that households and institutions are adopting a more defensive stance. These are not definitive recession calls, but they are consistent with a risk-off macro backdrop.
3 months: recession unlikely absent a sharp external shock. 6 months: risk rises if unemployment continues to climb and growth indicators roll over further. 12 months: the probability is high enough to warrant active monitoring, especially if labor weakness broadens or real activity loses momentum.
Bottom line: base case remains no near-term recession, but the margin of safety has narrowed. Investors should treat this as an environment favoring quality balance sheets, defensives, adequate liquidity, and disciplined risk management rather than aggressive cyclicality.