Recession Risk 33/100 — November 11, 2026

Recession Risk Score: 33/100 — MODERATE (-5 vs 30 days ago)

Today’s Recession Risk Score is 33/100 (MODERATE), and it has fallen by 5 points over the past 30 days (from 38 on Oct 12, 2026 to 33 on Nov 11, 2026). The headline message: near-term recession risk is contained, mainly because the labor market is still not sending a classic deterioration signal and the yield curve has re-steepened. That said, the “soft landing” narrative is becoming more conditional: inflation re-accelerated in October, increasing the probability of a renewed policy squeeze into early 2027. (bls.gov)

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Score Trend — Last 30 Days

Over the last 30 days (Oct 12 → Nov 11, 2026), the score moved from 38 to 33 (-5). The window saw a wide range: max 46, min 33, with an average of 38—a choppy month where risk repeatedly spiked but failed to sustain momentum.

The shape looks like a mean-reversion / “risk spikes sold” pattern rather than a sustained deterioration. In the last 10 readings, the score oscillated between the mid-30s and high-30s before landing at the cycle low (33) today—suggesting that some prior tightening/slowdown fears are being discounted, largely due to labor stability and curve normalization. The key caveat: inflation data (released Nov 10) is the kind of shock that can reverse mean reversion quickly if it forces the Fed’s hand. (bls.gov)

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Key Drivers

1. Sahm Rule remains “all clear”

   • Sahm Rule: 0.00 pp (no trigger). This is a major real-time recession “off switch” because it indicates unemployment hasn’t risen enough (relative to its recent low) to match typical recession onset dynamics.
   • Risk impact: strongly risk-reducing (keeps the score out of HIGH despite ugly leading cyclical pockets).

2. Initial jobless claims still extremely low

   • Initial claims: 189k (week ended Nov 5, 2026), the fewest since mid-July per the Labor Department reporting covered in the press.
   • Risk impact: confirmatory of labor-market resilience—recession calls typically need claims to trend higher persistently, not make cycle lows. (apnews.com)

3. Yield curve re-steepening reduces the “imminent recession” signal

   • 2s10s ~ +25 bp (Nov 10, 2026), with the 2-year around 4.73% and the 10-year around 4.98% in end-of-day data aggregations.
   • Risk impact: reduces classic inversion-warning pressure, shifting the narrative from “late-cycle inversion” to “post-inversion steepening,” which often aligns with either stabilization or the transition into a new regime. (bondviz.nikolayvalev.com)

4. Manufacturing is expansionary, not contractionary

   • ISM Manufacturing PMI: 55.5 (Oct 2026)—a solid expansion print and inconsistent with an imminent broad industrial recession.
   • Risk impact: dampens near-term recession probability, especially relative to periods where PMI < 50 persists.

5. Inflation re-accelerated, raising the probability of renewed tightening

   • CPI +0.4% m/m in October (released Nov 10, 2026), following a +0.6% September gain. Market commentary framed the release as materially raising the odds of a December hike, with discussion even of a potentially larger-than-standard move in some commentary.
   • Risk impact: raises “policy error / demand shock” risk, particularly into early 2027 if real rates rise into weakening cyclicals. (bls.gov)

6. Forward-looking cyclicals deteriorating despite strong coincident data

   • Temporary help services: 2,526K (DANGER) and freight: -0.4 (DANGER) continue to flash “pre-layoff” and “goods economy slowdown” signals.
   • Risk impact: keeps the score in MODERATE, because these are historically sensitive early-cycle downside indicators even when payrolls and claims look fine.

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Category Breakdown

(Using your provided CATEGORY BREAKDOWN counts.)

• Primary Indicators: 3 safe / 5 watch / 1 danger
  Mixed but not recessionary: the presence of watch signals matters, but the absence of a broad “danger cluster” is why risk is contained.

• Secondary Indicators: 2 safe / 0 watch / 1 danger
  Thin coverage here, but the single danger argues for keeping hedges up even as labor holds.

• Housing & Construction: 0 safe / 0 watch / 2 danger
  Housing is the clearest weak pocket: permits and starts are both recession-adjacent when they fall below trend—this is the most unambiguously negative category today.

• Business Activity: 2 safe / 1 watch / 0 danger
  Business activity remains supportive; this aligns with the PMI expansion message and helps explain why the score is not rising.

• Consumer Credit Stress: 1 safe / 2 watch / 1 danger
  Early stress is building (delinquencies, low savings cushion). This is not a crisis, but it is a tail-risk amplifier if unemployment turns.

• Market Signals: 5 safe / 4 watch / 5 danger
  Markets are internally conflicted: index levels look fine, but valuation and macro-sensitive cross-asset ratios skew riskier—consistent with “late-cycle pricing with fragile confidence.”

• Liquidity: 0 safe / 1 watch / 2 danger
  Liquidity is not breaking, but it’s not comfortable either; facility depletion and broader fiscal constraints increase the chance a shock transmits faster than expected.

• Real-Time / High-Frequency: 0 safe / 1 watch / 1 danger
  The high-frequency layer remains “one foot on the brake”: labor high-frequency looks okay, but goods-sensitive real-time signals remain soft.

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Biggest Movers

(From your BIGGEST MOVERS block; interpreting directionally.)

1. ON RRP Facility ($252M): +285.7% (7D) — contradictory / mixed
   A rise from near-depletion is mechanically “more liquidity buffer,” but the level is still tiny versus historical norms, so it’s more a stabilization than a true easing impulse.

2. Sahm Rule (0.00): -133.3% (7D) — contradictory (improving)
   The Sahm reading moving down/away from trigger is risk-reducing and consistent with contained recession odds over the next quarter.

3. NY Fed Recession Probability (7.3%): -78.8% (7D) — contradictory (improving)
   A sharp drop signals model-implied recession odds fell quickly—consistent with the re-steepened curve and/or improved financial conditions inputs.

4. Freight Transportation Index (-0.4): +76.9% (7D) — confirmatory (still worsening risk)
   The improvement in the index value (less negative than before) can look “better,” but the indicator remains DANGER and still implies freight is contracting, just at a slower pace.

5. Yield Curve (2s30s) (0.75): -8.1% (7D) — confirmatory (slightly higher risk)
   A flatter long-end slope can matter if it reflects long-end growth doubts; however, given 2s10s is positive, the broad curve message is still “not inverted.”

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90-Day Indicator Trends

Important limitation: The “90-day history” block you provided contains partial series coverage and many series end in early/mid-September (rather than running through Nov 11, 2026). Where possible, I use (1) your current readings plus (2) the last available historical points to describe direction of travel.

Labor & income (still resilient, but no longer strengthening)

• Initial claims: drifted from ~209k (mid-Aug) down to ~203–206k (late Aug/early Sep) in your history, and now prints 189k in the current snapshot—improvement and clearly not recessionary.
• Unemployment rate: flat at 4.1% across the historical window shown and still 4.1% today—stable, but “WATCH” because flat can become up fast once the turn begins.
• Real personal income ex transfers: $16.6T → $16.6T (little change in the history shown), but $17.0T today suggests a meaningful step-up vs August levels—supportive for consumption if inflation doesn’t erode it.

Production & business activity (gradual improvement)

• Industrial production index: rose from ~102.6 (Aug 13) to ~103.0 (late Aug/early Sep) in your history; today it’s 104.0 (SAFE)—a clear uptrend and consistent with “no imminent industrial recession.”
• Inventory-to-sales ratio: 1.28 → 1.30 (Aug) and today 1.33—still consistent with manageable inventories, though continued rise can become a risk if demand slows.

Housing (rolled over and stayed weak)

• Housing starts: dropped from ~1427k (Aug 13) to ~1239k (Aug 19 onward); today 1221k (WARNING)—housing weakness looks persistent, not transitory.
• Building permits: shifted from ~1374k (Aug 13) up to ~1443k (Aug 19) then ~1433k; today 1398k (WARNING)—a downshift versus late-Aug levels.

Credit & liquidity (quiet stress building)

• HY credit spreads: tightened slightly in late Aug/early Sep in your history (~271 bps → ~260–266 bps), but today read ~342 bps (WATCH)—that’s a material widening versus the history window and a sign markets are pricing higher cyclical/default risk.
• ON RRP facility: in your history, levels were already very low (hundreds of millions, with one spike to ~$7B on Sep 1), and today it’s $252M—still near depleted, implying less “shock absorber” if reserves tighten.

Markets & valuations (risk-on levels with fragile cross-asset signals)

• S&P 500: your history shows ~7799 in mid-Aug drifting to ~7719 in early Sep, while today’s snapshot is 7354—a notable decline versus that historical subset even though you label it “near highs” in the current regime.
• NASDAQ-to-GDP: remained DANGER and roughly 0.82 → 0.81 in the history shown; today 0.765 (DANGER)—still extreme, but less extreme than mid-Aug.

Net: over the past ~90 days, the economy looks like “firm coincident, soft leading.” That combination typically produces slowdown scares (your base case) rather than immediate recessions—until/unless labor breaks.

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Stock Screener Signals

Today’s screener is dominated by “value dividend” flags: ARCC, AIG, BBY, FNF, HMC, T, LTM, BCE. Interpreted macro-wise, that cluster suggests the market is leaning toward cash-flow durability and yield rather than high-multiple growth—consistent with a regime where investors are increasingly sensitive to rates staying higher for longer after the October CPI surprise.

Two names stand out as explicit oversold growth: CHTR (RSI 28) and TLK (RSI 30). That combination—defensive/value yield screens plus selective oversold growth—often appears in late-cycle “barbell” positioning: investors want income/defense, but they’re also scanning for mean-reversion in rate-sensitive or levered growth that has been de-rated.

One caution: several listed dividend yields are clearly data-artifact levels (e.g., 1002%, 654%, 773%) rather than investable reality, so treat the “yield” column as a signal label (high-yield/valuation compression) more than a literal payout forecast. The underlying macro message still holds: pricing is increasingly about valuation discipline and downside protection, not broad cyclical optimism.

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Latest Economic Developments

• Inflation: The Bureau of Labor Statistics reported CPI +0.4% m/m in October (released Tuesday, Nov 10, 2026). Multiple outlets framed the report as keeping inflation pressure elevated and increasing confidence the Fed will need to respond. (bls.gov)
• Fed reaction function: Post-CPI coverage highlighted that the inflation print raises the likelihood of a December rate hike, and commentary referenced discussion of the Fed potentially considering a larger-than-typical move (at least as a risk case in market pricing and analyst commentary). (axios.com)
• Fed communication (Nov 10): A published Fed Board speech (Vice Chair for Supervision Bowman) discussed the macro backdrop and noted conditions consistent with markets reassessing risk and spreads widening, highlighting the Fed’s ongoing attention to inflation dynamics and financial conditions transmission. (federalreserve.gov)
• Rates/curve: The 2s10s curve was about +25 bp on Nov 10, consistent with a meaningful re-steepening versus inversion regimes; this reduces the classic “inversion = imminent recession” signal, though steepening can also occur in late-cycle transitions depending on why it steepens. (bondviz.nikolayvalev.com)
• Labor: Initial claims at 189,000 for the week ended Nov 5 were widely described as exceptionally low, reinforcing that layoffs remain scarce in the aggregate. (apnews.com)
• Markets: On Nov 10, major U.S. equity indexes fell as yields rose after the CPI release, reflecting repricing toward tighter-for-longer policy expectations. (apnews.com)

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Near-Term Outlook (Next 30 Days)

The next 30 days are about whether inflation forces the Fed to tighten into a slowing set of leading indicators.

Base case (highest probability): slowdown scare, not recession

• Labor remains firm (claims low; Sahm not triggering).
• Business activity signals still lean expansionary (e.g., PMI narrative).

Key swing factor: December FOMC expectations harden after CPI

• With CPI re-accelerating in October, markets are increasingly focused on whether the Fed signals (or implements) additional tightening rather than holding steady. (axios.com)

Catalysts that would push the score higher quickly:

• A sustained uptrend in claims (watch weekly prints for a 4–6 week trend change).
• Any acceleration in unemployment that moves the Sahm Rule meaningfully upward.
• Abrupt spread widening (HY OAS) or liquidity stress events, especially given the low level of cash-like buffers implied by facility usage.

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Long-Term Outlook (3-6 Months)

Three forces will compete into early 2027:

1. Labor inertia vs. leading cyclicals

   • Labor markets usually turn with a lag; temporary help and freight are telling you the goods/cyclical engine is softening first.
   • If that softness bleeds into hiring, the recession probability rises non-linearly because labor deterioration feeds back into credit and consumption.

2. Inflation path and the policy “risk asymmetry”

   • The October CPI print reinforces a key asymmetry: the Fed can tolerate slower growth if inflation is sticky, but the economy cannot tolerate repeated tightening impulses indefinitely.
   • The biggest recession-risk scenario is not “weak growth today,” but a policy-driven demand shock after inflation proves persistent. (bls.gov)

3. Financial conditions: still okay, but less forgiving

   • The curve is no longer inverted (helpful), but if inflation stays hot and yields rise, financial conditions can tighten via:
     • higher borrowing costs,
     • wider credit spreads,
     • equity multiple compression—especially in tech-heavy indices already flagged by valuation/GDP ratios in your dashboard.

Net: the 90-day trend mix argues for contained recession odds near-term, but a higher chance of a late-2026/early-2027 growth accident if inflation forces the Fed into a more restrictive stance than households and cyclicals can absorb.

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What to Watch

Labor (highest signal value)

• Weekly initial claims: watch for a sustained move above ~220k and accelerating.
• Unemployment rate: any climb above 4.3%–4.5% would likely move Sahm meaningfully.
• Sahm Rule: watch for movement toward 0.50 pp (trigger zone).

Inflation & Fed

• Next CPI / core inflation prints: confirmation that October was not a one-off.
• Fed speaker tone: any shift from “data dependent” to “must act” would raise recession risk via financial conditions.

Credit & liquidity

• HY OAS: watch for widening toward 450–500 bps as an early warning of default-cycle dynamics.
• Bank unrealized losses + any funding stress headlines: the transmission risk is liquidity-driven, not solvency-driven—until it isn’t.

Housing

• Permits and starts: continued deterioration would signal a deeper interest-rate sensitivity problem, especially if paired with rising delinquencies.

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Sources

No data available for this window.