Recession Risk

The Recession Risk gauge answers "how close is the U.S. economy to a recession right now?" — low, medium, or high. It blends leading and coincident indicators across the labor, rates, credit and household channels (yield curve, jobless claims, Sahm Rule, financial-conditions indices, card delinquencies, consumer sentiment). Each input is risk-aligned so "high" always means "more contractionary" regardless of whether the underlying series is high-good or high-bad. The two strongest historical recession signals (Sahm Rule, Yield Curve) carry double weight, with Recession Probability and Initial Claims just behind at 1.5×, so the gauge fires even when slower indicators lag. Valuation models are deliberately excluded: multiples sat above the 97th percentile continuously from 2017, contributing a fixed offset rather than recession signal, and they fall during recessions — pulling the gauge down at exactly the wrong moment.