Secondary Recession Indicators
Secondary indicators confirm what the primary signals suggest. ISM PMI, consumer sentiment, Fed Funds, initial claims, and GDP growth each capture a different dimension of cyclical momentum and rarely disagree with primary signals for long.
Why this category matters
Secondary indicators reduce false-positive risk. When the Sahm Rule flashes but ISM, initial claims, and GDPNow are all stable, the primary signal is often a head-fake driven by labor-supply noise rather than genuine contraction.
How to read it
Secondary indicators work best as a confirming panel. Look for at least two of four flashing the same direction before adjusting your recession probability.
Historical lead time
Secondary indicators lead recessions by 3 to 9 months. ISM PMI under 48 for three consecutive months has a strong recession-confirmation track record.
Indicators in this category
Frequently asked questions
What does ISM Manufacturing PMI below 50 mean?
A PMI reading below 50 means the manufacturing sector is contracting. Below 48 for three consecutive months has historically coincided with or preceded recessions in eight of the last nine cycles.