Recession Risk 39/100 — November 9, 2026

Recession Risk Score: 39/100 — MODERATE (+1 vs 30 days ago)

Today’s Recession Risk Score is 39/100 (MODERATE), up +1 point versus 30 days ago (from 38 → 39). The headline read is consistent with a slowing-but-still-expanding regime: labor “hard stop” signals are not firing, and real activity remains resilient. However, the mix is getting less comfortable—credit risk and confidence are doing more of the “recession work” as labor stays calm. Net: recession is not the base case for the next 90 days, but downside tail risk is rising.

Score Trend — Last 30 Days

Over the last 30 days (window 2026-10-10 → 2026-11-09), the score drifted modestly higher from 38 to 39 (+1), but the path was noisy. The range was wide (Min 34 / Max 46, average 38), implying the macro narrative is not trending steadily toward recession—but the market-and-policy layer is highly reactive to each data print.

The last 10 readings show a repeated “risk-on / risk-off” oscillation: 34 → 44 → 34, then a grind around the mid-to-high 30s before today’s 39. That shape is consistent with a regime where hard data (labor, production) keeps pulling risk back down, while soft data and financial conditions (sentiment, volatility, spreads, liquidity) periodically spike the risk score. In plain terms: the system looks more like stabilizing with recurring stress bursts than a clean mean-reversion to “low risk.”

Key Drivers

1. Labor remains “strong hire, low fire” (risk-reducing)

   • Initial jobless claims: 189k for the week ending Oct. 31, reported Nov. 5—one of the lowest readings this year. (dol.gov)
   • October payrolls: +165k; unemployment rate 4.1% (reported Nov. 6). (bls.gov)
   • Bottom line: the fastest recession triggers (claims, unemployment acceleration) are not flashing.

2. Sahm Rule remains dormant (risk-reducing)

   • Tracker reading: 0.00 (SAFE) today, and it was negative/near-zero in the 90-day history (e.g., -0.03 to -0.07 in Aug–Sep snapshots provided).
   • Interpretation: you don’t have the type of broad-based labor deterioration associated with imminent recession calls.

3. Manufacturing is firmly expansionary (risk-reducing)

   • ISM Manufacturing PMI: 55.5 in October, up from 54.5 in September—10th straight month of expansion per ISM commentary. (ismworld.org)
   • This is not the manufacturing profile that typically precedes a near-term recession.

4. Growth tracking improved meaningfully in early November (risk-reducing, but fragile)

   • Atlanta Fed GDPNow (2026:Q4): 3.4% on Nov. 4, down from 3.7% on Nov. 2—still solid. (atlantafed.org)
   • This acts as a counterweight to gloomier soft data.

5. Credit spreads are the main macro crack (risk-increasing)

   • HY OAS: ~348 bps as of Nov. 5, described as elevated and rising in your assessment; external tracking sources also place HY OAS at 348 on that date. (dollarliquidity.com)
   • Rising spreads increase “shock sensitivity” if growth wobbles (especially with thin household buffers).

6. Confidence remains crisis-level (risk-increasing)

   • UMich sentiment: ~48.0 in October vs 48.1 in September—deep pessimism and effectively sideways at depressed levels. (isr.umich.edu)
   • Low sentiment doesn’t cause recessions alone, but it makes consumption more vulnerable if labor softens.

Category Breakdown

Using the provided CATEGORY BREAKDOWN counts:

• Primary Indicators: 3 safe / 5 watch / 1 danger — Mixed but still anchored by labor stability; the watch cluster suggests “late-cycle cooling,” not acute contraction.
• Secondary Indicators: 2 safe / 0 watch / 1 danger — Thin set, but the presence of a danger flag here reinforces that “under the hood” cracks exist even while the headline economy holds up.
• Housing & Construction: 0 safe / 0 watch / 2 danger — Housing is the clearest cyclical weak spot; if rates stay restrictive, this category can keep bleeding into broader activity.
• Business Activity: 2 safe / 1 watch / 0 danger — Business activity signals remain net supportive; this aligns with the ISM expansion backdrop.
• Consumer Credit Stress: 1 safe / 2 watch / 1 danger — Stress is not systemic, but it’s not clean either; this category is a key transmission channel if hiring slows.
• Market Signals: 5 safe / 4 watch / 5 danger — Internals are conflicted: index levels look fine, but fear/valuation/commodities-type signals are flashing caution.
• Liquidity: 0 safe / 1 watch / 2 danger — Liquidity is the quiet vulnerability: when liquidity is tight, small problems can become nonlinear quickly.
• Real-Time / High-Frequency: 0 safe / 1 watch / 1 danger — The fast indicators aren’t unanimously recessionary, but the danger count is a reminder that “all-clear” is not warranted.

Biggest Movers

Top 5 by absolute 7-day % change (from your BIGGEST MOVERS block), with interpretation:

1. ON RRP Facility ($150M): +285.7% (7D) — Contradictory / stabilizing-ish
   Higher usage can imply marginally more cash parking at the Fed versus circulating, but given the base is tiny and your note says it’s “depleted,” treat this as noise around a low level, not a decisive macro swing.

2. Sahm Rule (0.00): -133.3% (7D) — Contradictory (improving risk)
   The direction here is risk-reducing: the Sahm framework is moving away from trigger territory.

3. NY Fed Recession Probability (6.6%): -78.8% (7D) — Contradictory (improving risk)
   A big drop in a probability estimate is risk-reducing, but these model outputs can gap around yield/term-premium dynamics.

4. Freight Transportation Index (-0.4): +76.9% (7D) — Contradictory (improving, but still weak)
   Improvement is good, but the level remains negative (DANGER in your table). Think “less bad,” not “good.”

5. Yield Curve (2s30s) (0.79): -8.1% (7D) — Slightly confirmatory (worsening, modest)
   Less steepening can be a mild risk-increase if it reflects growth skepticism, but your overall curve set is not screaming recession today.

90-Day Indicator Trends

Your 90-day history snapshot is strongest for direction of travel rather than daily granularity (many series are flat for long stretches). Still, several meaningful trends stand out:

Labor & income (resilient, with select cooling edges)

• Initial claims moved from ~209k mid-August to ~203–206k in early September in your history, and you now report 189k for Oct. 31 week—directionally improving (fewer layoffs). This matches the “low fire” narrative. (dol.gov)
• Unemployment rate in the history is pinned around 4.1% across Aug–Sep, and the official October print is 4.1%—remarkably stable. (bls.gov)
• JOLTS quits rate drifts from 2.0% → 1.9% in early September in your history—softening worker bargaining power at the margin (a cooling signal, but not a recession signal by itself).
• Real personal income ex transfers in your history shows a lift from $16.6T to $16.61T late Aug; today’s reading is $17.0T (WATCH). Directionally positive, but “WATCH” implies the concern is the trend and purchasing power, not the level.

Real activity & production (steady-to-better)

• Industrial production index in your history rises from ~102.6 (Aug 11) to ~103.0 (late Aug–early Sep); today is 104.0 (SAFE)—a modest uptrend over ~90 days consistent with continued expansion.
• Manufacturing employment is WATCH and “below trend” in your dashboard; that aligns with a world where output expands, but hiring is cautious.

Housing (clear cooling vs 90 days ago)

• Housing starts in your history drop from 1427k (Aug 11) to 1239k (Aug 19 onward); today’s starts are 1221k (WARNING)—housing has been weak for months and hasn’t meaningfully re-accelerated.
• Building permits improved from 1374k (Aug 11) to 1443k (Aug 19) then flatlined around 1433k in early September; today’s permits are 1398k (WARNING)—a softening vs late-August levels.

Financial conditions, liquidity, and stress (where tail risk is building)

• HY spreads were ~260–275 bps in your late Aug/early Sep history but are ~348 bps by Nov. 5—this is the cleanest 90-day “risk-up” move in your dataset. (dollarliquidity.com)
• VIX in the 90-day history is ~14–16; today is 28.2 (WATCH)—a material jump in uncertainty consistent with your “interest-rate uncertainty is high” framing.
• ON RRP bounces around tiny figures in the history and remains flagged WARNING today—liquidity plumbing is not screaming crisis, but it’s also not providing a big cushion.
• Market valuation ratios (S&P P/E 22x; NASDAQ P/E 30x; market cap to GDP proxies flagged WARNING) keep the system sensitive to rate surprises.

Summary of the 90-day setup: hard activity/labor signals are stable-to-better, housing is weak, and financial conditions/credit are deteriorating—a classic “risk migrates from the real economy to the balance-sheet channel” pattern.

Stock Screener Signals

Today’s screener is dominated by value dividend flags (ARCC, AIG, BBY, FNF, HMC, T, LTM, BCE) with two oversold growth names (CHTR, TLK). That combination usually shows up when the market is selectively de-risking: investors still want equity exposure, but they prefer cash flows and payout profiles over long-duration growth.

Two important reads from this basket:

1. Defensive cash-flow preference is rising.
   Telecom (T, BCE, TLK) and finance/insurance (AIG, FNF, ARCC) skew toward “get paid while you wait.” In a macro context where credit spreads have widened and policy uncertainty is elevated, that’s consistent with positioning for slower growth and higher volatility, not an outright recession call.

2. Targeted oversold signals suggest dispersion, not broad capitulation.
   CHTR (RSI 28) and TLK (RSI 30) point to idiosyncratic drawdowns. That fits your Market Signals split: indexes “look fine,” but underneath, there’s rotation and stress pockets rather than a uniform risk-off.

One caution: several displayed dividend yields in the screener are clearly non-economic (e.g., 1002%), indicating data artifacts (special distributions, stale fields, or parsing issues). The qualitative takeaway still holds: the screen is emphasizing lower-multiple, cash-flow profiles over expensive cyclicality.

Latest Economic Developments

Labor data stayed strong into early November. Initial jobless claims fell to 189,000 for the week ending Oct. 31 (reported Nov. 5), reinforcing “low fire.” (dol.gov) The October employment report (released Nov. 6) showed +165,000 payrolls and an unemployment rate of 4.1%, beating expectations and keeping recession alarm bells quiet. (bls.gov)

The Fed held policy steady in late October, but the market’s hiking odds rose. The FOMC maintained the target range at 3.75%–4.00% on Oct. 28, 2026. (federalreserve.gov) Since then, stronger labor data and inflation anxiety have pushed market-implied December hike probabilities higher—Atlanta Fed’s compiled market probability shows ~82.35% for a hike by Dec. 16, and other market reporting puts odds in the high-70s/low-80s range around Nov. 6. (atlantafed.org)

Manufacturing momentum remained a bright spot. ISM reported 55.5 for October manufacturing, consistent with a still-expanding industrial sector. (ismworld.org)

Markets showed heightened volatility. Reporting from Nov. 6 described sharp moves and heightened focus on CPI and the Fed path; this aligns with today’s elevated VIX reading (28.2 in your dashboard) and the broader “rates uncertainty” channel that can tighten conditions without a formal hike. (kiplinger.com)

Near-Term Outlook (Next 30 Days)

The next month is about whether the economy can keep the current balance: firm labor + slowing housing + tightening-ish credit without tipping into a negative feedback loop.

Key near-term catalysts:

• CPI (October) — Nov. 10, 2026: A hotter print would validate the market’s hawkish repricing and could push HY spreads wider, raising recession tail risk via financial conditions.
• Fed communications (ongoing through November): With December hike odds elevated, every inflation-credibility signal matters more than growth signals right now.
• Next jobs report (November employment) — Dec. 4, 2026 (BLS schedule): Labor remains the pivot. A rise in unemployment or a claims upshift would change the risk score faster than most other data. (bls.gov)
• Credit and liquidity monitoring: Watch whether HY OAS can stabilize below ~350 bps; failure to do so keeps downside risk bid.

Baseline (next 30 days): MODERATE risk, choppy score, with upside risk to the score if CPI surprises hot and financial conditions tighten further.

Long-Term Outlook (3-6 Months)

Over a 3–6 month horizon, the recession question becomes less about today’s strong labor and more about transmission:

• If policy stays restrictive (or turns more restrictive): Housing weakness persists, rate-sensitive demand stays capped, and corporate refinancing costs remain a headwind. Even with payroll growth, the margin can erode through credit first.
• If credit spreads keep widening from already-elevated levels: The economy can slide from “slowing expansion” to “accident risk” quickly—especially with thin household buffers (low savings rate in your dashboard) and rising consumer credit stress.
• If labor finally cools: The first place to watch is not the unemployment rate headline; it’s temporary help, quits, and claims trend. Your dashboard already flags Temporary Help Services (DANGER)—a classic early warning that firms are quietly reducing flexible staffing ahead of broader cuts.

Interpretation of the 90-day trajectory: real-side activity measures (industrial production, ISM, GDPNow) look healthy, but the system is becoming more financial-conditions constrained. That’s the setup for a non-linear shift: the economy can look fine—until it doesn’t—if spreads and volatility remain elevated while savings buffers stay thin.

What to Watch

Hard thresholds / tripwires

• Initial claims: sustained move >220k (your stated line) would be an early warning that “low fire” is ending.
• HY OAS: sustained >400 bps would indicate a materially tighter credit regime; >500 bps would be consistent with genuine recession-risk escalation.
• Sahm Rule: any meaningful move toward trigger territory would rapidly change the 90-day recession base rate.

Key scheduled events

• Oct CPI — Nov. 10, 2026
• FOMC — Dec. 16, 2026 (market odds currently elevated for a hike) (atlantafed.org)
• Employment Situation (Nov data) — Dec. 4, 2026 (bls.gov)

Market-based tells

• Watch whether equities hold near highs while VIX remains elevated—that combination often signals fragile positioning and susceptibility to gap moves.
• Track whether the market continues rotating toward value/dividend and away from long-duration growth—consistent with late-cycle tightening conditions.

Sources

No data available for this window.