Stages describe the model’s overall economic regime. Status labels describe the individual signals that determine that regime.
Stage 1 is the lowest-stress regime. Higher stages require progressively broader confirmation of economic stress.
Labels such as Stable, Mixed, Watch and Stressed summarize the rules being triggered inside Growth, Labor, the yield curve and credit.
Each step adds a specific form of economic vulnerability or confirmation. The model does not move higher simply because one report is weak.
When multiple stage conditions are satisfied, the higher-risk satisfied rule is the published stage.
Meaning: The economy is in the model’s baseline expansion regime. Broad real-economy stress is not persistent and no yield-curve vulnerability watch is active.
Meaning: Expansion is still intact, but the prior yield-curve inversion keeps the economy inside the model’s vulnerability window.
Meaning: Weakness in Growth + Labor has persisted long enough to become a genuine real-economy slowdown signal rather than a one-month wobble.
Meaning: The real-economy slowdown is persistent and at least one independent financial warning is reinforcing it.
Meaning: Persistent economic weakness, yield-curve vulnerability and strong credit stress are aligned.
Meaning: the model’s strongest contraction test is met: persistent economic stress is being confirmed by both a late labor warning and strong credit deterioration.
These labels are shorthand for the model’s frozen scoring rules. They are not subjective descriptions.
Growth stress is not triggered.
Industrial Production’s 3-month change is weak enough to trigger the Growth stress rule.
Growth stress = 1 when the 3-month Industrial Production change is at or below its rolling 50th percentile, using up to the prior 120 months and at least 60 prior observations.
Neither labor component is contributing stress.
One of the two labor components is contributing 0.5 stress.
Both components are contributing, producing Labor stress of 1.0.
Unemployment adds 0.5 when its 3-month deterioration is at or above its rolling 50th percentile. Initial Claims add 0.5 when the 4-week average versus one year earlier is at or above its rolling 55th percentile.
The combined stress condition has not persisted.
The slowdown signal has persisted enough to unlock Stage 3 or higher.
Raw Growth + Labor stress is triggered when Growth stress + Labor stress is at least 1.5. It becomes persistent when that raw condition appears in at least 2 of the last 3 months.
No inversion remains inside the model’s current 12-month memory window.
A monthly 10Y–3M inversion occurred within the current month plus the prior 11 months.
The model uses the official monthly 10Y–3M Treasury spread. The watch is active if any monthly spread is below 0 within the 12-month window.
Credit is below the model’s confirmation threshold.
Credit deterioration has reached the first confirmation threshold.
Credit deterioration has reached the model’s strong-stress threshold.
The model measures the Baa corporate yield minus the 10Y Treasury and ranks its 12-month widening versus trailing history. Watch begins at the 50th percentile; Strong / Stressed begins at the 60th percentile.
The Sahm labor warning is not active.
The unemployment-based late-stage confirmation rule has been triggered.
The warning activates at 0.50 percentage point or higher: the 3-month average unemployment rate minus its lowest 3-month average over the prior 12 months.
These indicators help explain the broader economic picture. Their rankings are descriptive context labels — they do not vote on the current model stage. Each card below explains both the indicator and what determines its status.
Both the 3-month and 6-month growth rates are positive.
The 3-month and 6-month growth rates point in different directions.
Both the 3-month and 6-month growth rates are negative.
The website compares the current 3-month and 6-month growth rates. Both above zero = Strengthening; both below zero = Weakening; otherwise = Mixed.
The dollar value of new orders received by U.S. manufacturers.
Persistent improvement can point to firmer future production; persistent weakness can signal softer business demand.
Both the 3-month and 6-month real-growth rates are positive.
The 3-month and 6-month real-growth rates disagree.
Both the 3-month and 6-month real-growth rates are negative.
The website compares the current 3-month and 6-month real-growth rates. Both above zero = Strengthening; both below zero = Weakening; otherwise = Mixed.
Retail spending adjusted for inflation, giving a view of real consumer demand for goods.
Focus on 3M, 6M and 12M real growth rather than the raw level alone.
The latest real-services spending change is zero or positive.
The latest real-services spending change is negative.
The context label follows the sign of the latest real-services spending change: zero or above = Strengthening; below zero = Weakening.
Inflation-adjusted consumer spending on services.
Use the monthly direction and 3M growth to look for persistent strengthening or weakening.
Recent housing-start growth is positive across the short- and medium-term readings.
Short- and medium-term housing-start growth are giving different signals.
Recent housing-start growth is negative across the short- and medium-term readings.
The housing label is a directional context read built from the recent growth rates shown by the website. It summarizes whether short- and medium-term housing momentum is broadly positive, mixed, or negative; it does not determine the model stage.
The annualized pace of privately owned homes that began construction.
Use 3M, 6M and 12M changes to judge whether residential activity is gaining or losing momentum.
Recent permit growth is positive across the short- and medium-term readings.
Short- and medium-term permit growth are giving different signals.
Recent permit growth is negative across the short- and medium-term readings.
The permits label is a directional context read built from the recent growth rates shown by the website. It summarizes whether short- and medium-term permit momentum is broadly positive, mixed, or negative; it does not determine the model stage.
The annualized number of privately owned housing units authorized for construction.
Permits can lead actual construction, so persistent changes can provide a forward-looking housing signal.
The recent 3-month annualized inflation pace is at least 0.15 percentage point below the year-over-year pace.
The recent 3-month annualized pace is within 0.15 percentage point of the year-over-year pace.
The recent 3-month annualized inflation pace is at least 0.15 percentage point above the year-over-year pace.
Status = 3-month annualized Core PCE minus year-over-year Core PCE. ≤ −0.15 pp = Cooling; ≥ +0.15 pp = Heating; otherwise = Stable.
A consumer-spending price index excluding food and energy to highlight underlying inflation pressure.
Use 3M annualized, 6M annualized and year-over-year inflation — not the raw index level.
The recent 5-day average is more than 0.10 percentage point above the 3-month average.
The recent 5-day average is within ±0.10 percentage point of the 3-month average.
The recent 5-day average is more than 0.10 percentage point below the 3-month average.
Status compares the latest 5-day average with the 3-month average. Difference > +0.10 pp = Rising; < −0.10 pp = Falling; otherwise = Stable. This is directional context, not a good/bad score.
The market yield on U.S. Treasury securities with roughly two years to maturity.
Changes in the 2-year yield help show how markets are repricing Federal Reserve policy and short-term rates.
The recent 5-day average spread is more than 0.10 percentage point below the 3-month average.
The recent 5-day average spread is within ±0.10 percentage point of the 3-month average.
The recent 5-day average spread is more than 0.10 percentage point above the 3-month average.
Status compares the latest 5-day average with the 3-month average. Difference > +0.10 pp = Widening; < −0.10 pp = Narrowing; otherwise = Stable.
The extra yield investors demand on lower-rated corporate bonds relative to safer government debt.
Widening generally signals more stress; narrowing generally signals easier financial conditions.
The latest quarter-over-quarter annualized real GDP growth rate is above zero.
The latest quarter-over-quarter annualized real GDP growth rate is zero or below.
The website uses the sign of the latest quarter-over-quarter annualized real GDP growth rate: above zero = Expanding; zero or below = Contracting. GDP is an outcome/reference series, not a model stage input.
The inflation-adjusted value of goods and services produced in the U.S. economy.
Quarter-over-quarter and year-over-year growth provide a broad outcome view of economic activity.
The official NBER recession indicator is not marking the month as recessionary.
The official NBER recession indicator marks the month as part of a recession.
This is not a model score. It follows the official historical U.S. recession indicator used for recession shading: 0 = expansion period, 1 = recession period.
The official historical dating of U.S. business-cycle peaks and troughs used for recession shading and historical context.
It is retrospective confirmation, not a real-time signal.