Recession Risk 34/100 — June 13, 2026

Recession Risk Score: 34/100 — MODERATE (-4 vs 30 days ago)

Today’s Recession Risk Score is 34/100, keeping the outlook in the MODERATE band. The score has fallen by 4 points over the past 30 days (from 38 to 34), reflecting a steady easing in near-term recession odds as labor and credit remain constructive. The key reason risk isn’t lower: consumer fragility (low savings, depressed sentiment) and geopolitical/energy shock risk still represent asymmetric downside. In short, the economy looks “still expanding, but easy to knock off balance.”

Score Trend — Last 30 Days

The last 30 days show a net drift lower in recession risk: Start 38 → End 34 (−4), with a range of 33 to 44 and an average of 36 (31 samples). The path wasn’t a clean slide—risk repeatedly spiked back to 38 in the last 10 days (June 6–7 and June 12), but those spikes failed to stick, reverting quickly to 34.

The shape is best described as mean-reverting with downside bias: the system is repeatedly testing higher-risk levels (mid-to-high 30s) but snapping back as claims stay contained, spreads remain tight, and equities hold near highs. That pattern typically implies no broad-based deterioration is underway—yet the sensitivity to headline shocks (energy, geopolitics, rates) remains elevated.

Key Drivers

1) Labor-market recession triggers remain dormant (Sahm Rule far from firing).

• Sahm Rule: 0.10 (SAFE) vs the classic 0.50 trigger.
• Initial claims: 229K (week ending June 6, 2026)—up, but still consistent with expansion; the Labor Department release on June 11, 2026 characterized filings as historically low. (apnews.com)
  This keeps the highest-weight real-time recession trigger firmly “off.”

2) Payroll growth remains positive and unemployment is stable.

• May 2026 nonfarm payrolls: +172K; unemployment: 4.3% (BLS, released June 5, 2026). (bls.gov)
  Hiring momentum reduces the probability of a rapid, 90-day recession shift—unless layoffs accelerate sharply.

3) Manufacturing is a tailwind—but “job-light.”

• ISM Manufacturing PMI: 54.0 (May) = 5th month of expansion, with employment index still contracting at 48.6. (ismworld.org)
  This configuration often corresponds to output growth with hiring caution—good for near-term activity, less supportive for labor re-acceleration.

4) Financial conditions and credit stress remain benign.

• Chicago Fed NFCI: ~−0.51 (loose conditions). (equibles.com)
• High-yield OAS: 278 bps (SAFE) in your dashboard snapshot.
  Tight spreads and loose conditions are inconsistent with an imminent credit-led recession.

5) Consumers are the weak link (sentiment is crisis-level, savings are thin).

• UMich sentiment: 49.8 (DANGER) in today’s reading; the preliminary June 2026 survey improved to 48.9 from May’s 44.8, but remains historically depressed. (axios.com)
• Personal saving rate: 2.6% (DANGER) (April in your summary).
  Low savings + pessimism = high vulnerability to shocks (especially fuel/energy).

6) Geopolitical/energy shock risk is the primary near-term macro tail risk.

• Reporting over the last 24–48 hours highlights continued disruption risk around Hormuz, with market participants focused on whether “shock absorbers” (inventories/rerouting) can hold through summer. (axios.com)
  This is the clearest channel for risk to rise quickly: oil → inflation expectations → tighter financial conditions → real-income squeeze.

Category Breakdown

• Primary Indicators: 3 safe / 4 watch / 2 danger
  Core macro is mixed: labor-based triggers are calm, but consumer/real-economy internals still show stress pockets.

• Secondary Indicators: 2 safe / 0 watch / 1 danger
  Second-tier signals are broadly supportive; the “danger” item(s) here are not yet spreading system-wide.

• Housing & Construction: 0 safe / 2 watch / 0 danger
  Housing is cooling but not collapsing—more slowdown signal than recession signal at present.

• Business Activity: 2 safe / 1 watch / 0 danger
  Business activity is modestly constructive; manufacturing breadth is improving even if hiring lags.

• Consumer Credit Stress: 0 safe / 3 watch / 1 danger
  Credit stress is rising at the margin (delinquencies/debt service), but not yet flashing systemic distress.

• Market Signals: 7 safe / 2 watch / 5 danger
  Markets are split: index levels and volatility look calm, while valuation and “fear ratios” (and some macro-sensitive ratios) argue complacency/overextension.

• Liquidity: 0 safe / 1 watch / 2 danger
  Liquidity signals are the most uncomfortable “plumbing” bucket; thin buffers can amplify shocks even when growth is okay.

• Real-Time / High-Frequency: 0 safe / 1 watch / 1 danger
  High-frequency data is not recessionary overall, but it’s not cleanly improving—important given shock risk.

Biggest Movers

From the top 5 by |7-day % change|:

1. Bank Unrealized Losses ($5155B): +931.1% (7D) — Confirmatory (worsening)
   A sharp jump in unrealized losses is a classic “fragility” amplifier: it doesn’t cause recession alone, but it can turn liquidity stress into credit tightening if a shock hits.

2. NY Fed Recession Probability (6.1%): −61.5% (7D) — Contradictory (improving)
   A big decline here reduces model-implied recession odds and is consistent with the broader easing in your score.

3. SLOOS Lending Standards (8.1%): −47.0% (7D) — Contradictory (improving)
   Less net tightening suggests credit availability isn’t deteriorating—a key reason recession risk stays moderate rather than high.

4. Sahm Rule (0.10): −25.9% (7D) — Contradictory (improving)
   This is the highest-weight “fast trigger.” Moving down reinforces the message: no labor-market break yet.

5. DXY (Dollar Index) (120.1): +25.0% (7D) — Ambiguous to confirmatory
   A stronger dollar can tighten financial conditions and weigh on global/goods demand, but the net recession implication depends on whether it reflects safe-haven stress or growth differentials.

90-Day Indicator Trends

Your 90-day histories show a consistent theme: the economy is not rolling into a classic labor/credit recession, but consumer resilience is thinning and several “early warning” series are uncomfortable.

Labor & real-time triggers

• Sahm Rule: 0.27 (mid-March) → 0.20 (early April) → 0.10 (today). That’s a clear improvement and the opposite of a recession on-ramp.
• Initial claims: 213K (Mar 15) → ~202K (Apr 9) → 229K (Jun 6 week, current). The direction over ~90 days is higher recently, but still in a historically benign zone; the key is whether it breaks above ~260K and stays there.

Financial conditions, volatility, and credit

• NFCI: around −0.51 (Mar 15) → ~−0.43 (early April) → −0.51 (current): conditions briefly tightened but are back to loose.
• VIX: ~27 (mid-March) → ~18 (late March/early April) → 19.4 (today): volatility normalized, consistent with stable risk appetite.
• High-yield spreads (history block): roughly 317–328 bps (mid-March/early April) vs ~278 bps today (dashboard). That is a meaningful tightening, inconsistent with recession stress.

Consumers: fragile and getting more constrained

• Personal saving rate: 4.5% (mid-March/early April) → 2.6% (current): this is a large deterioration in household buffer stock.
• UMich sentiment: ~56.4 (mid-March) → ~49.8 (today) with the preliminary June print noted at 48.9—still extremely weak even after improving off May lows. (axios.com)
• Credit card delinquency: ~2.9% flat in the history block, but categorized WATCH (elevated).

Housing and business activity: cooling, not collapsing

• Building permits: ~1376K → ~1386K in the history block (small improvement), while your current reading is 1423K (WATCH)—still “moderate, slowing.”
• Housing starts: ~1487K (Mar/Apr) → 1465K (today): mild cooling.
• Manufacturing employment (level): steady around 12.6M (WATCH)—consistent with “job-light” manufacturing expansion.

Markets: strong indexes, stretched valuations

• S&P 500: ~6632 (Mar 15) → 7431 (today): strong rally—supportive of growth sentiment.
• Valuation flags: S&P P/E 22x (WATCH), NASDAQ P/E 30x (WATCH), market-cap-to-GDP style ratios WARNING/DANGER—these don’t predict recession directly, but they increase vulnerability to a tightening shock.

Net 90-day takeaway: recession risk is being held down by labor + credit stability, but held up by consumer fragility + shock sensitivity (energy/geopolitics and liquidity plumbing).

Stock Screener Signals

Today’s screener is dominated by “value dividend” names—ARCC, AIG, BBY, FNF, HMC, T, BCE, plus a couple of oversold growth flags (CHTR, TLK) and an international cyclically exposed name (LTM). This mix typically suggests the quant engine is seeing relative value and cash-yield appeal rather than broad appetite for high-multiple growth leadership.

Two important interpretations:

• Defensive income bias: The prevalence of dividend/value tags implies investors are emphasizing carry and valuation support—a common posture when growth is “okay” but uncertainty is elevated (your case: energy/geopolitical risk + low consumer savings).
• Selective mean reversion: Oversold flags like CHTR (RSI 28) and TLK (RSI 30) suggest pockets of idiosyncratic stress and potential rebound setups rather than a market-wide risk-off regime.

One data-quality note from the screener itself: the listed yields (e.g., 1002%, 654%) look mechanically distorted (likely data scaling or special distributions). Treat the directional message (value/income preference) as more reliable than the literal yield prints.

Latest Economic Developments

Labor data remains expansion-consistent. The most recent weekly claims data (released June 11) showed initial jobless claims rising to 229,000 for the week ending June 6—higher than prior weeks but still historically low. (apnews.com) The market impact of this type of move is usually limited unless it becomes a trend (multiple weeks with a rising 4-week average).

Consumer sentiment improved off the floor, but remains depressed. The preliminary June University of Michigan sentiment reading rose to 48.9, the first increase in months, with reporting attributing some of the improvement to lower gas prices. (axios.com) This is supportive at the margin, but a sub-50 print remains consistent with high perceived stress and fragile discretionary demand.

Energy/geopolitics is the swing variable. Over the past day, coverage has emphasized that oil markets have stayed more resilient than feared, but the system could become more vulnerable later in the summer if inventories thin and the Strait’s disruption persists or re-escalates. (axios.com) Meanwhile, reporting indicates the “stranglehold” on Hormuz has loosened somewhat as some Gulf oil reaches market, which helps explain why the macro data is not (yet) reflecting an energy-led tightening shock. (apnews.com)

Bottom line: The last 48 hours reinforced the same macro configuration: labor OK + credit OK + consumers fragile + geopolitics the main tail risk.

Near-Term Outlook (Next 30 Days)

The next month is about whether today’s benign pillars (labor and credit) can stay intact as the shock channel (energy) remains live.

What’s most likely:

• Risk score stays in the low-to-mid 30s if claims remain contained and spreads stay tight.
• A “moderate” growth track persists, consistent with your GDPNow 1.8% (WATCH) and GDP growth 1.6% (WATCH) backdrop.

Catalysts that could move the score meaningfully higher:

• Layoff uptrend: initial claims sustainably above ~260K, plus continuing claims turning up (not provided here, but crucial). This is the cleanest path to a fast Sahm acceleration.
• Energy spike / renewed shipping disruption: a sharp oil move would hit inflation expectations and real incomes, especially with the saving rate already low. (axios.com)
• Liquidity shock propagation: with liquidity indicators already flashing stress in your breakdown, any “plumbing” event could transmit faster than usual.

Catalysts that could move the score lower:

• Claims stabilize back toward the low-210s/low-220s and sentiment continues to recover (even modestly).
• Manufacturing expansion persists without a broader freight collapse.

Long-Term Outlook (3-6 Months)

Over a 3–6 month horizon, the macro story is a contest between structural consumer constraint and still-supportive financial/labor fundamentals.

Reasons risk could trend down:

• The Sahm Rule and claims would need to remain calm—today they are. If payrolls continue running positive and unemployment holds near the low-4s, recession risk typically compresses toward “low-to-moderate,” not “high.”

Reasons risk could trend up:

• Consumer buffer exhaustion is real: the saving rate collapse (to 2.6%) means shocks that would have been absorbed in prior years now translate into spending cuts more quickly.
• Market/valuation vulnerability raises the odds that a non-recession shock (rates, oil, geopolitics) turns into a financial-conditions tightening episode. Even if that doesn’t guarantee recession, it can push the risk score higher as second-round effects appear (credit cards, small business, housing).

Historical parallel (conceptual): late-cycle periods often show “good headline labor + worsening household balance dynamics” before a turn. The key difference right now is that credit spreads are not confirming stress, so this remains a vulnerability story—not a recession story.

What to Watch

Hard thresholds (high signal):

• Initial claims: sustained >260K (and rising 4-week average).
• Sahm Rule: a move toward 0.30+ would be the first “meaningful” acceleration; 0.50 is the classic trigger.
• HY OAS: watch for a regime shift from ~278 bps to >400 bps (early warning) and >550 bps (stress).

Consumer stress tripwires:

• Further deterioration in credit card delinquency and debt service ratio (already WATCH).
• Any renewed collapse in sentiment if gasoline prices turn up again. (axios.com)

Geopolitical/energy tape:

• Confirmed escalation/de-escalation around Hormuz shipping access and insurance availability—this is the most plausible “fast macro” catalyst in the current setup. (apnews.com)

Market internals:

• If equities remain near highs but volatility and credit begin to diverge (VIX up + spreads widening), treat it as an early warning that the “calm” regime is ending.

Sources

No data available for this window.