The likelihood of a recession hitting is increasing based on our analysis of September 2019 Treasury yield data. Other key indicators, such as unemployment, are mixed.
Our monthly U.S. recession predictor, based on a Federal Reserve model, has identified all recessions since 1955. In 2007, we used it to warn clients of the high likelihood of an impending recession.
The model predicts the probability of a recession starting 8 months out. The interactive graph below shows this probability over time, with actual recessions highlighted.
The data series used in the model are:
No predictive method is perfect. However, the term spread method is statistically robust and has given accurate signals so far (1953-2016, but with two false positives) and is viewed as a trusted indicator by experts.