Recession Risk 38/100 — November 10, 2026

Recession Risk Score: 38/100 — MODERATE (-6 vs 30 days ago)

Today’s Recession Risk Score is 38/100 (MODERATE), and the direction of travel is down versus 30 days ago (-6 points, from 44 to 38). The macro message remains “soft pockets, but no broad break”: the highest-signal labor triggers (Sahm Rule and initial claims) are not flashing recession risk. At the same time, recession-sensitive cyclicals (temp help, freight) and psychology (consumer sentiment) continue to lean late-cycle defensive, keeping the score in the moderate band rather than falling into “low risk.”

Score Trend — Last 30 Days

Over the last 30 days (2026-10-11 → 2026-11-10), the score moved from 44 to 38 (-6), with a min of 34, max of 46, and a 30-day average of 38 (31 samples). That profile—average equals today’s reading—suggests the system is mean-reverting around the high-30s rather than trending relentlessly toward recession.

The shape of the last 10 readings shows volatility without follow-through: a sharp drop to 34 on Nov 2, a bounce back to 44 on Nov 1, multiple re-tests of 34 (Nov 5, Nov 7–8), and then stabilization near 38–39 (Nov 9–10). Interpreting that pattern: markets and soft data are jittery, but hard labor data is anchoring the cycle—preventing risk from trending into the 50s/60s while still allowing day-to-day swings driven by sentiment, rates/oil, and risk pricing.

Key Drivers

1. Labor market: expansionary and not recession-triggering

   • Nonfarm payrolls: +165k (October 2026); unemployment rate: 4.1% (released Nov 6, 2026)—consistent with continued expansion rather than contraction. (bls.gov)
   • Initial jobless claims: 189k (released Nov 5, 2026), the kind of level typically associated with low layoff intensity. (apnews.com)
   • Sahm Rule: 0.00 (SAFE)—still well below trigger dynamics.

2. Growth tracking improved sharply (near-term momentum firmed)

   • Atlanta Fed GDPNow for 2026:Q4: 3.5% as of Nov 9, 2026, a meaningful upward revision that pushes the “growth scare” narrative toward “growth resilience.” (atlantafed.org)

3. Cyclicals are warning (classic late-cycle leading indicators)

   • Temporary Help Services: 2,526K (DANGER)—temp help is a high-signal labor leading indicator and tends to weaken before broader payrolls roll over.
   • Freight Transportation Index: -0.4 (DANGER)—suggesting the goods economy is not re-accelerating, despite stronger aggregate GDP tracking.

4. Consumer psychology is recession-like even if spending and jobs aren’t

   • UMich consumer sentiment: 48.1 (DANGER)—a crisis-level reading that often correlates with households feeling squeezed (inflation, energy, rates), even when employment is stable. (Recent UMich reporting keeps the index around ~48 in October, highlighting persistent cost-of-living frustration.) (axios.com)

5. Risk pricing: volatility is elevated, but broad financial conditions aren’t “tight”

   • VIX: ~28 (WATCH) — elevated uncertainty and hedging demand; Reuters noted a sharp jump to around 28 amid an “AI trade” stumble. (investing.com)
   • Chicago Fed NFCI: about -0.46 (WATCH/near normal)—still indicating conditions are not broadly restrictive. (fred.stlouisfed.org)

6. Household buffers are thin; credit stress is creeping

   • Personal savings rate: 3.8% (WARNING)—low cushion if the labor market weakens.
   • Credit card delinquency: 2.9% (WATCH) and debt service ratio: 11.1% (WATCH)—not a crisis, but directionally late-cycle.

Category Breakdown

• Primary Indicators: 3 safe / 5 watch / 1 danger
  Mixed but labor-heavy primary signals remain non-recessionary, keeping risk contained despite softening in select components.

• Secondary Indicators: 2 safe / 0 watch / 1 danger
  Secondary data is not broadly deteriorating, but one danger signal keeps the “soft landing” narrative from being fully clean.

• Housing & Construction: 0 safe / 0 watch / 2 danger
  Housing is the clearest weak spot—starts and permits remain below trend, consistent with rate sensitivity and affordability pressure.

• Business Activity: 2 safe / 1 watch / 0 danger
  Business activity is stable overall; not the profile of an economy about to contract within 90 days.

• Consumer Credit Stress: 1 safe / 2 watch / 1 danger
  Credit stress is rising at the margin; it’s not yet forcing layoffs, but it can amplify downturns if labor weakens.

• Market Signals: 5 safe / 4 watch / 5 danger
  Markets are bifurcated: headline indices near highs, while volatility/fear gauges and macro-sensitive ratios imply fragile confidence.

• Liquidity: 0 safe / 1 watch / 2 danger
  Liquidity signals are not comfortable, especially with ON RRP near depletion—less “cash parked,” more sensitivity to shocks.

• Real-Time / High-Frequency: 0 safe / 1 watch / 1 danger
  High-frequency is split: claims stay benign, while some activity proxies (like freight) remain weak.

Biggest Movers

1. ON RRP Facility ($150M): +285.7% (7D) — Contradictory / mixed.
   The move is large in percentage terms, but the base is tiny; directionally, it’s still consistent with RRP being near depleted, which can mean less liquidity buffer.

2. Sahm Rule (0.00): -133.3% (7D) — Contradictory (improving risk).
   A lower/near-zero Sahm reading supports the view that unemployment dynamics are not recessionary.

3. NY Fed Recession Probability (6.6%): -78.8% (7D) — Contradictory (improving risk).
   A sharp drop suggests the model-based signal is less concerned about recession risk than a week ago.

4. Freight Transportation Index (-0.4): +76.9% (7D) — Confirmatory (still recession-leaning).
   Even if “less negative” than before, freight remains below zero and still tagged DANGER—consistent with a weak goods cycle.

5. Yield Curve (2s30s) (0.79): -8.1% (7D) — Mostly contradictory (slightly worsening, but still normal).
   A bit of flattening is not ideal, but with the curve still positive, the classic inversion pressure remains reduced.

90-Day Indicator Trends

Even with an incomplete 90-day panel for some series (several histories shown run mainly through early September), the directional message across the available window is clear: hard activity and “no-layoffs” labor stayed firm, while cyclicals/sentiment stayed weak.

Industrial production (SAFE): upshift in the level

• From 102.6 (Aug 12) to ~103.0 (late Aug/early Sep) in the history panel, and 104.0 today. That’s a clear upward drift in the production level over the broader window—consistent with “growth holding up.”

Initial jobless claims (SAFE): stable-to-lower

• In the history slice, claims oscillated around 199k–209k (Aug–Sep), and the latest reported value is 189k (Nov 5), implying improvement in layoff pressure into early November. (apnews.com)

Sahm Rule (SAFE): remains non-triggering

• History shows slightly negative readings (around -0.03 to -0.07), and 0.00 today—still nowhere near recession trigger territory. The key point isn’t the small week-to-week math; it’s that it remains OFF.

Consumer sentiment: persistently depressed

• The series remains around the high 40s to mid-50s in the August/September panel, and is 48.1 today—a sustained pessimism regime, consistent with real-income anxiety and energy/inflation stress. (axios.com)

Financial conditions (NFCI): near normal

• NFCI around -0.46 (week ending Oct 30) indicates conditions remain looser than average, not the kind of tightening that typically precedes a near-term recession. (fred.stlouisfed.org)

Markets: elevated fear without a full financial accident

• VIX shifted from mid-teens in the August panel to ~28 now, consistent with a regime change in uncertainty/risk premia—yet this has not (yet) translated into broad credit seizure. (investing.com)

Bottom line on the 90-day tape: the labor “hard stop” triggers aren’t moving, but late-cycle fragility is rising through sentiment, volatility, and cyclical employment (temp help) and goods activity (freight). That combination is exactly what tends to keep recession risk moderate—not low, but not imminent.

Stock Screener Signals

Today’s quant flags cluster heavily in value/dividend and oversold buckets: ARCC, AIG, BBY, FNF, HMC, T, LTM, BCE alongside oversold growth like CHTR and TLK. The market implication is not “pricing an immediate recession,” but rather investors leaning defensive and cash-flow oriented while still selectively hunting for beaten-down growth opportunities.

Two observations matter for macro interpretation:

1. Defensive yield-seeking is showing up in the screen.
   Telecom (T), financial/insurance (AIG), and credit vehicles (ARCC) being flagged suggests carry is back in fashion—a typical late-cycle posture when investors want income and “valuation support.” That usually aligns with moderate recession risk: cautious, not panicked.

2. Oversold growth flags point to volatility-driven dislocations rather than broad earnings collapse.
   Names like CHTR (RSI ~28) and TLK (RSI ~30) read more like risk-off repricing than recession-confirming fundamental deterioration—consistent with elevated VIX and a choppy tape.

One important caveat from the raw screener output: several displayed dividend yields (e.g., “hundreds of percent”) appear mechanically inflated or distorted (likely due to special distributions, data errors, or price/dividend mismatches). Treat the macro signal as “income + value factor bid”, not the literal yield prints.

Latest Economic Developments

• Labor market beat expectations in October.
  The official BLS Employment Situation (released Nov 6, 2026) showed +165,000 payrolls and 4.1% unemployment, reinforcing the “strong hire, low fire” narrative seen in post-release commentary. (bls.gov)

• Weekly claims underscored low layoffs.
  The 189,000 initial claims print (reported Nov 5) marked one of the lowest readings in months, consistent with a labor market that may be cooling but is not cracking. (apnews.com)

• Growth nowcasting improved materially.
  The Atlanta Fed’s GDPNow is at 3.5% for 2026:Q4 as of Nov 9, reinforcing the idea that near-term growth momentum is not deteriorating into recession dynamics. (atlantafed.org)

• Markets: volatility spiked, then stabilized with oil swings.
  Reuters coverage tied a jump in the VIX toward ~28 to a tech-led stumble and demand for hedges. (investing.com) Separately, equities rallied as oil moved lower, reflecting how energy-price fluctuations are currently a key macro transmission channel into risk sentiment. (apnews.com)

Near-Term Outlook (Next 30 Days)

The next month is set up as a verification window: do the weak cyclical/sentiment signals finally show up in layoffs and unemployment, or do they remain “noise” against still-solid demand?

What likely matters most for the score over the next 30 days:

• High-frequency labor confirmation

  • Weekly initial claims: the key risk is a trend shift, not a one-week print. A sustained move up from ~190k toward the mid-200s would start to change the story.
  • Next Employment Situation: Friday, Dec 4, 2026 (BLS schedule explicitly stated in the November release). (bls.gov)
    Watch: unemployment rate, average weekly hours, temp help component, and diffusion across industries.

• Inflation and policy expectations

  • Markets are already pricing significant odds of further tightening into December per calendar commentary, and CPI is a near-term catalyst for rates volatility. (kiplinger.com)
    If inflation re-accelerates (especially energy pass-through), that could keep volatility elevated and pressure housing/credit-sensitive sectors.

• Risk conditions

  • If VIX remains ~high-20s and high-yield spreads widen meaningfully from current elevated-but-not-crisis levels, recession probability in markets could rise even without immediate labor deterioration.

Long-Term Outlook (3-6 Months)

The 3–6 month picture remains a contest between resilient hard data and late-cycle fragility.

• Why the baseline is still “moderate, not high” recession risk

  • The best recession-timing signals in this framework—Sahm Rule and jobless claims—remain benign.
  • GDPNow at 3.5% implies the economy has near-term momentum; recessions rarely begin when nowcasts are improving. (atlantafed.org)

• Why the system refuses to go “low risk”

  • Temp help and freight weakness are classic “early cracks,” particularly if companies are quietly de-risking payrolls at the margin.
  • Consumer sentiment near the high-40s is consistent with a household sector that feels under stress—meaning if unemployment rises even modestly, spending could downshift quickly.

Historical parallel (mechanism, not prediction): late-cycle episodes often show a long plateau where markets and sentiment deteriorate first, while claims and unemployment lag—until a threshold is crossed. The score trajectory (mean-reverting in the high-30s with volatility spikes) fits that “plateau” pattern: risk is present, but not yet compounding.

What to Watch

• Labor tripwires

  • Initial claims: watch for a multi-week uptrend versus isolated prints.
  • Unemployment rate: even a move from 4.1% toward 4.4–4.6% over several months would materially change the Sahm dynamics.

• Cyclical confirmation

  • Temp help: any additional leg down would be a strong warning that firms are preparing for softer demand.
  • Freight: watch whether the index remains negative or reverts toward neutral—this often leads manufacturing/jobs.

• Financial stress thresholds

  • VIX: persistence above ~25–30 tends to tighten financial conditions via risk appetite even if NFCI stays near normal.
  • Credit spreads: meaningful widening from current levels would be confirmatory of rising default risk and funding stress.

• Growth nowcasts

  • GDPNow: whether 3.5% holds as new data arrives (retail sales, industrial production, housing prints). A sustained slide back toward ~1% would be a recession-risk accelerant.

Sources

No data available for this window.