Recession Risk 34/100 — June 14, 2026

Recession Risk Score: 34/100 — MODERATE (+1 vs 30 days ago)

Today’s Recession Risk Score is 34/100 (MODERATE), up +1 from 33 thirty days ago (May 15 → June 14, 2026). The near-term recession playbook still isn’t “on” because labor-market break signals are quiet (Sahm Rule 0.10, initial claims 229k) and credit remains easy (HY OAS ~2.74%, Chicago Fed NFCI -0.51). The score is nonetheless drifting higher at the margin because consumer psychology is near crisis territory (UMich prelim June 48.9) and late-cycle high-frequency indicators (temp help, freight) continue to lean downside. Net: slowdown risk > recession risk, but the system is more fragile if sentiment shock starts transmitting into hiring and delinquencies.

Score Trend — Last 30 Days

Over the last 30 days (May 15 → June 14), the score moved 33 → 34 (+1) with an average of 36, a min of 33 and a max of 44 (31 samples). That “34 handle” at the end matters: it signals we’re not in a regime shift toward imminent recession, but we’re also not in the clean, low-risk environment that would keep the average pinned in the low 30s.

The shape is best described as spiky mean-reversion: risk popped into the low-to-mid 40s briefly, then reverted back toward the mid-30s. In the last 10 readings, we’ve toggled between 34 and 38 (with several quick reversals), implying the macro complex is balanced but unstable—small shocks to oil/energy, rates, or jobs data can push the score higher quickly, but the underlying labor/credit foundation is still strong enough to pull it back down.

Key Drivers

1. Labor market “break” indicators remain inactive (core recession-negative).

   • Sahm Rule: 0.10 (SAFE) vs the classic 0.50 trigger.
   • Initial jobless claims: 229k for week ending June 6, 2026—still historically low, even if edging up. (apnews.com)

2. Financial conditions are loose (credit not pricing stress).

   • Chicago Fed NFCI: -0.51 (SAFE) (loose conditions).
   • High yield OAS: ~2.74% (June 4) — very tight for a true pre-recession tape. (ycharts.com)

3. The yield curve is no longer screaming “near-term recession.”

   • Your 2s10s: +0.39 (WATCH) and 2s30s: +0.90 (SAFE) indicate re-steepening, which typically reduces the classic “inversion timing” signal for the next ~90 days (though it does not eliminate 6–18 month slowdown risk).

4. Consumer psychology is the biggest macro contradiction.

   • UMich preliminary June sentiment: 48.9 (your “DANGER” regime; you also list 49.8 today’s reading) — levels historically associated with severe stress even after a small rebound. (axios.com)

5. Real-economy high-frequency leads are late-cycle fragile.

   • Temporary Help Services: 2,490k (DANGER) — temp staffing tends to roll over early when firms want optionality.
   • Freight Transportation Index: 0.5 (DANGER) — goods economy softness persists.

6. Household buffers are thin even as markets melt up.

   • Personal savings rate: 2.6% (DANGER) + credit card delinquency: 2.9% (WATCH) = less cushion if jobs soften.
   • Meanwhile, equities remain near highs (S&P 500 7431; NASDAQ 25889) with valuation warning lights (e.g., NASDAQ/GDP 0.8136 DANGER), creating asymmetric risk if financial conditions tighten abruptly.

Category Breakdown

Using your category counts:

• Primary Indicators: 3 safe / 4 watch / 2 danger
  Mixed but not recessionary: labor- and growth-sensitive primaries are watching for deterioration, not confirming it.

• Secondary Indicators: 2 safe / 0 watch / 1 danger
  Secondaries are mostly supportive, with one persistent red flag that hasn’t translated into broader stress.

• Housing & Construction: 0 safe / 2 watch / 0 danger
  Housing is cooling but not collapsing: permits/starts sit in “moderate slowing” territory.

• Business Activity: 2 safe / 1 watch / 0 danger
  Business activity is decelerating but functional, consistent with “slowdown” not “downturn.”

• Consumer Credit Stress: 0 safe / 3 watch / 1 danger
  Credit stress is rising at the edges (delinquencies, debt service), and the savings-rate danger signal makes this bucket a key transmission channel.

• Market Signals: 7 safe / 2 watch / 5 danger
  Markets are internally bifurcated: index levels/vol are calm, but macro/valuation ratios and “fear metals” lean defensive.

• Liquidity: 0 safe / 1 watch / 2 danger
  Liquidity is less forgiving (notably ON RRP depletion). This tends to matter most when something breaks elsewhere.

• Real-Time / High-Frequency: 0 safe / 1 watch / 1 danger
  High-frequency data remains the most recession-sensitive pocket of the model—still negative enough to keep the score from falling.

Biggest Movers

Top 5 by absolute 7‑day % change (and what they mean for risk):

1. Bank Unrealized Losses ($5,155B): +931.1% (7D) — confirmatory (worsening)
   This magnitude reads like a data discontinuity, but directionally it reinforces a vulnerability: if rates or funding stress spike, the system’s mark-to-market sensitivity can reappear quickly.

2. ON RRP Facility ($454M): -76.5% (7D) — confirmatory (worsening)
   The steady drain suggests less excess cash parked at the Fed, potentially reducing a shock absorber during volatility.

3. NY Fed Recession Probability (6.1%): -59.0% (7D) — contradictory (improving)
   A sharp drop here is a meaningful offset: it argues the medium-term recession probability inferred from the curve/conditions is falling, not rising.

4. SLOOS Lending Standards (8.1%): -47.0% (7D) — contradictory (improving)
   Less net tightening is pro-growth and typically delays recession dynamics—important given how often recessions arrive via a credit supply channel.

5. US Interest Expense ($1,219B): +29.2% (7D) — confirmatory (worsening, longer-lag)
   This doesn’t usually drive a 90-day recession call, but it matters for the 3–12 month fiscal/term-premium backdrop (and can eventually crowd out other spending).

90-Day Indicator Trends

Your “90-day history” window provided (March 16 → early April data points for many series) shows directional tensions:

• Labor & “break” signals (still steady-to-good):

  • Initial claims rose from ~205k–213k (mid/late March) to 229k (June 6 week, today’s reading). That’s a modest drift higher, not a break—yet it’s the kind of move that becomes important if it continues in a stair-step pattern. (apnews.com)
  • Unemployment rate in your series eased from 4.4% (mid-March) to 4.3% (early April); today you list 4.3% (WATCH)—stable but not improving.

• Sentiment (downshift, then tiny bounce):

  • UMich sentiment in your history is ~56.4–56.6 (March/early April), while the latest preliminary June print is 48.9—a sharp deterioration over ~60–90 days, even with June’s small rebound from May. (axios.com)
    This is the clearest “soft-to-hard data” risk: sentiment can stay low for a while, but if it starts hitting discretionary spending, payroll softness can follow.

• Credit & financial conditions (still easy, improving vs March):

  • HY OAS moved from ~317–328 bps (mid/late March–early April in your history) down to ~278 bps today—a material tightening that is anti-recession in the near term. (ycharts.com)
  • NFCI in your history moved from -0.51 (mid-March) toward -0.43 (early April) (less loose), while today you list -0.51 again—suggesting conditions may have re-loosened.

• Housing (soft, not breaking):

  • Housing starts and permits were ~1.49M and ~1.38M in your March/April history; today you list starts 1.465M and permits 1.423M—a mixed but generally cooling profile, consistent with slower growth rather than contraction.

• Market/valuation regime (risk of asymmetry):

  • Equities in your history (early April) show S&P ~6,783 and NASDAQ ~22,635, while today’s readings are far higher (S&P 7,431; NASDAQ 25,889). This “financial conditions via wealth effect” is supportive—until it isn’t. The valuation-based danger signals (e.g., NASDAQ/GDP) imply drawdown risk if rates re-price or earnings disappoint.

Bottom line: the 90-day trend is best described as “labor/credit stable → sentiment/real-economy leads deteriorating.” That combination typically produces slowdown first; recession risk rises materially only if labor starts following.

Stock Screener Signals

Today’s quant flags lean heavily toward “value dividend” profiles—ARCC, AIG, BBY, FNF, HMC, T, BCE—plus a couple “oversold growth” names (CHTR, TLK) with very low RSIs (CHTR RSI 28, TLK RSI 30). That mix usually reads as late-cycle positioning: investors want cash flow / defensiveness but are also selectively fishing for mean-reversion in beaten-down growth.

Two caveats jump out from the screener output:

• The stated dividend yields (e.g., ARCC 1002%, BBY 654%) look like data/split anomalies rather than investable yields. Treat the style signal (value/defensive) as meaningful, not the literal yield numbers.
• The presence of telecom (T), insurers (AIG), and finance-linked cash-flow names (ARCC, FNF) aligns with a market that is not pricing imminent recession, but is prioritizing resilience over cyclical upside.

Interpretation for macro: the equity tape is consistent with your MODERATE (34/100) score—not recession, but a market that expects growth to be constrained and prefers duration of cash flows (dividends/defensive) while still keeping a toe in oversold opportunities.

Latest Economic Developments

• Jobless claims (latest): Initial claims rose to 229,000 for the week ending June 6, 2026 (reported June 11). The level remains historically low and consistent with a labor market that is slowing but not cracking. (apnews.com)

• Consumer sentiment: The University of Michigan’s preliminary June sentiment index rose to 48.9 (reported June 12), the first improvement in several months, helped in part by lower gasoline prices. Even with the rebound, the level remains deeply depressed—near the zone associated with severe household stress. (axios.com)

• Fed setup into June FOMC: The June 16–17, 2026 FOMC meeting is the main near-term policy catalyst. Market-implied odds favor a hold in the current range (coverage citing ~98.5% hold probability), meaning the press conference and forward guidance matter more than the rate line. (kiplinger.com)

• Credit spreads: High yield spreads remain exceptionally tight—~2.74% (June 4) on the ICE BofA series—suggesting the bond market is not demanding recession compensation. (ycharts.com)

Near-Term Outlook (Next 30 Days)

Base case for the next month: range-bound risk score in the mid-30s, with event-driven spikes possible (upper-30s to low-40s) if labor data or energy-driven inflation surprises hit markets.

Key catalysts:

• FOMC (June 16–17, 2026): With a hold largely priced, risk hinges on whether messaging is hawkish (tightening financial conditions via guidance) or dovish (validating growth concerns and pulling yields lower). (kiplinger.com)
• Weekly jobless claims: Watch for a persistent move above the mid‑200k range and an upward-sloping 4-week average. One print doesn’t do it; a sequence does.
• Retail sales / consumer spending prints: With sentiment this low, the next “hard” spending data will be judged harshly—weakness would quickly elevate payroll/claims concerns.

Long-Term Outlook (3-6 Months)

The 3–6 month outlook is best framed as slow growth with asymmetric downside:

• Supportive pillars: credit conditions remain easy (tight HY OAS, loose NFCI), and labor break signals (Sahm Rule, claims) are far from recession triggers. (ycharts.com)
• Structural fragilities: household buffers (savings rate) are thin, and sentiment is operating at levels that historically correlate with reduced discretionary demand. If the labor market loses momentum, the consumer has less capacity to smooth consumption.
• Policy/term premium risk: elevated fiscal stress indicators (debt/interest expense) rarely cause an immediate recession by themselves, but they can worsen the medium-term tradeoff: higher term premium → higher borrowing costs → more pressure on housing, capex, and credit.

Historical parallel (pattern, not prediction): cycles that avoid recession often look like “soft data collapses, hard data lags, then either re-accelerates or rolls over.” Right now, your dashboard says we’re still in the lag phase—hard data hasn’t rolled yet, but the leading edges are fragile.

What to Watch

High-signal thresholds and dates:

• June 16–17, 2026 (FOMC): any guidance that pulls financial conditions tighter (hawkish hold) could lift the score quickly. (federalreserve.gov)
• Initial claims: a sustained move >250k, especially if the 4‑week average turns up for multiple weeks (not one-off seasonality).
• HY OAS: widening from ~2.74% toward >3.5% would be an early warning that credit is repricing risk. (ycharts.com)
• Consumer credit: credit-card delinquency continuing higher alongside a very low savings rate would indicate the consumer is shifting from “resilient” to “strained.”
• Temp help / freight: stabilization (even at low levels) would reduce the downside asymmetry; continued deterioration would keep the score biased higher.

Sources

No data available for this window.