6 Key Recession Indicators
Risk Score and Status below are Signycle's own simplified read of each indicator, weighted by us — not output from an official model or algorithm.
| Indicator | Current Value | Risk Score | Status |
|---|---|---|---|
🔄 Yield Curve (10Y–2Y) Live from FRED · Negative = recession warning · Weight: 25% |
+0.4% | ⚠️ Flattening | |
🏭 Global PMI Below 50 = contraction · Weight: 20% |
53.3 | ⚠️ Slowing | |
📊 HY Credit Spread Above 6% = stress · Weight: 20% |
3.2% | ✅ Normal | |
👷 Unemployment Trend Rising >0.5pp = recession · Weight: 15% |
+0.1pp | ✅ Stable | |
📉 Leading Econ. Index (LEI) Below –0.5% MoM = warning · Weight: 10% |
–0.3% MoM | 🔴 Declining | |
🛢️ Oil Price Shock Above $100/bbl = demand shock · Weight: 10% |
$93/bbl | ⚠️ Ceasefire — easing |
Historical Recession Probability Comparison
2008
2020
2022
2023
2024
NOW
How to Position for a Recession
A rising recession probability changes the Signycle signal framework. Here is how the indicators interact with cyclical stock positioning:
🔴 Avoid / Reduce
✗ Oil stocks — Brent at SELL threshold
✗ Copper miners — SELL zone
✗ Highly levered industrials
✗ Tankers at peak rates
✗ Copper miners — SELL zone
✗ Highly levered industrials
✗ Tankers at peak rates
🟢 Watch / Accumulate
✓ Defence stocks — structural demand
✓ Fertilizer at low prices (Yara)
✓ Cash and short duration bonds
✓ Waiting for BDI to hit BUY zone
✓ Fertilizer at low prices (Yara)
✓ Cash and short duration bonds
✓ Waiting for BDI to hit BUY zone
Not financial advice. Signycle is a macro signal tool — not an investment advisor.
The SO WHAT
What does a 54% recession probability mean for your portfolio?
🔴 Reduce exposure
Oil stocks — Brent at SELL
Copper miners — above threshold
Highly levered industrials
Tankers at peak rates
Copper miners — above threshold
Highly levered industrials
Tankers at peak rates
🟢 Structural holds
Defence (NATO rearmament)
Fertilizer at neutral prices
Cash for next cycle entry
Wait for BDI BUY signal
Fertilizer at neutral prices
Cash for next cycle entry
Wait for BDI BUY signal
See the full market cycle indicator — or explore every bull and bear market since 1900.
Frequently Asked Questions
Are we in a recession in 2026?
Not yet — but risk is elevated at 54%. The economy is in late-cycle territory. An oil price shock above $100/bbl is the biggest near-term risk. PMI has fallen below 50 and the leading economic index is declining. However, the yield curve remains positive (+0.4%) and unemployment is stable, which are the two most reliable recession indicators — both currently point away from imminent recession.
What is the most reliable recession indicator?
The yield curve (10Y–2Y Treasury spread) has preceded every US recession since 1950 with only two false positives. When the 10-year yield falls below the 2-year yield (inversion), a recession typically follows within 12–18 months. Currently the curve is at +0.4% — positive but flattening from the inversion seen in 2022–2023.
Is a recession coming in 2026?
The recession probability of reflects a weighted blend of 6 leading indicators — see the live score at the top of this page. The key swing factor being tracked is oil price shocks — if oil stays above $100/bbl for an extended period, recession risk would climb further; if it falls back toward $70-80, risk would ease.
What does PMI below 50 mean?
The Purchasing Managers Index (PMI) measures whether manufacturing and services activity is expanding (above 50) or contracting (below 50). The current Global PMI of 51.4 is just barely in contraction territory. Historically, a PMI sustained below 48 for 3+ months strongly correlates with recession. We are currently at the warning threshold but have not yet breached the recession zone.
How does the Hormuz crisis affect recession risk?
The Hormuz crisis (Iran's mining of the strait in February 2026) has sent oil prices above $100/barrel. Energy price shocks are historically one of the most reliable recession triggers — the 1973 oil embargo, the 1979 Iranian revolution, and the 1990 Gulf War all preceded recessions within 12 months. The current shock adds approximately 15-20 percentage points to the recession probability score.