RecessionRadar
Heuristic recession-risk index for U.S. recession conditions over the next 6-12 months, with a separately labeled implied 12M probability from historical calibration.
Methodology Disclosure
Target: directional risk indexing for U.S. recession conditions over the next 6-12 months.
Definition: NBER business-cycle dating is the official reference and is confirmed after the fact.
Model type: transparent heuristic weighted score (not machine-learning based), combining market-leading and coincident-economic indicators. The headline Risk Index is shown on a 0-100 scale, while the Implied 12M probability is a separate historical calibration output.
Decision-use protocol (standard interpretation)
- Rising Risk Index + High Data Integrity: interpret as broad confirmation of increasing recession risk.
- Rising Risk Index + Low Data Integrity: treat as provisional and re-check when live sources recover.
- Benchmark divergence above 20 points: require confirmation from subsequent runs before inferring a regime shift.
- Implied probability is a historical calibration output and should not be interpreted as a guarantee.
| Indicator | Weight |
|---|---|
| Sahm Rule proxy | 18% |
| NY Fed term spread proxy | 20% |
| Jobless claims trend | 16% |
| Credit spread | 14% |
| ISM new orders | 12% |
| NFCI financial conditions | 10% |
| Housing permits YoY | 12% |
Limitations
- This is a model estimate, not an official recession declaration.
- NBER recession dating is retrospective and may lag real-time conditions.
- Macro series can be revised after release; displayed values may change over time.
- Scores use adaptive historical normalization and should be interpreted as directional risk support.
- When data integrity is low, prioritize trend direction and benchmark agreement over exact point values.
Model governance policy
- Threshold or weight changes are versioned and documented before production deployment.
- Fallback policy updates require explicit rationale and are reflected in disclosure language.
- Methodology changes are communicated as structural updates and should not be interpreted as cycle-state events.
Weight rationale and citations
- Top weighting on term-spread and labor-cycle indicators follows recession-probability and labor-turning-point literature.
- Yield-curve framing: Estrella & Mishkin (1998), with term-spread signals treated as core leading context.
- Sahm framework anchors labor-cycle deterioration as a high-signal confirmation layer.
- Sensitivity note: if credit/NFCI temporarily spike while Sahm and term-spread remain moderate, treat one-run jumps cautiously and rely on the 4-run rolling view.
Connecting to data sources…
Attempting to load macro and market signals from upstream APIs.