Methodology — How the Macro IQ Score Is Built

Every number on this site traces back to a primary source series, a stated transformation, and a fixed scoring rule — nothing is hand-tuned after the fact. 32 indicators from FRED, the BEA, and the Census Bureau are normalized to a common 0–100 stress scale, aggregated into six pillar composites, and rolled up into one Macro IQ score where higher always means more stress. The same rules run on every refresh, three times a week.

The 32 indicators.

Grouped by the pillar they feed. Source series are the exact FRED and BEA identifiers the pipeline pulls.

Indicator	Source series	Transformation	Direction
American Dreamhousing · 5 components
30-Year Mortgage Rate	MORTGAGE30US	Level, %	↓ good
Home Price Growth YoY	CSUSHPISA	YoY %	↓ good
Real Disposable Income YoY	DSPIC96	YoY %	↑ good
Existing Home Sales	EXHOSLUSM495S	Level	↑ good
Months Supply of New Homes	MSACSR	Level, ratio	↓ good
Consumer Resiliency5 components
Consumer Sentiment	UMCSENT	Index level	↑ good
Retail Sales YoY	RSXFS	YoY %	↑ good
Real Disposable Income YoY	DSPIC96	YoY %	↑ good
Personal Savings Rate	PSAVERT	Level, %	↓ good
Consumer Credit Growth	TOTALSL	YoY %	↓ good
Labor Leveragescored as worker strength · 5 components
Average Hourly Earnings YoY	CES0500000003	Level, %	↓ good
Nonfarm Payroll Change	PAYEMS	Level	↓ good
JOLTS Job Openings	JTSJOL	Level	↓ good
Quits Rate	JTSQUR	Level, %	↓ good
U-6 Underemployment Rate	U6RATE	Level, %	↑ good
Industrial Pipelinescored as strength · 3 components
Capacity Utilization	TCU	Level, %	↓ good
GDP Growth	A191RL1Q225SBEA	YoY %	↓ good
Industrial Production YoY	INDPRO	YoY %	↓ good
Fed's Tightrope5 components
Fed Funds Rate	FEDFUNDS	Level, %	↓ good
Real Policy Rate	derived	Level, %	↓ good
10Y-3M Yield Curve	T10Y3M	Level, %	↑ good
CPI Inflation	CPIAUCSL	YoY %	↓ good
Core PCE Inflation	PCEPILFE	YoY %	↓ good
Credit Pulse4 components
HY Credit Spread (OAS)	BAMLH0A0HYM2	Level, %	↓ good
Consumer Credit Growth	TOTALSL	YoY %	↓ good
Credit Card Delinquency Rate	DRCCLACBS	Level, %	↓ good
Baa-10Y Credit Spread	BAA10Y	Level, %	↓ good
Context indicatorstracked across the site, not scored inside a pillar
Unemployment Rate	UNRATE	Level, %	↓ good
Initial Jobless Claims	ICSA	Level, thousands	↓ good
Median Home Price	MSPUS	Level, $	context
Existing Home Sales	EXHOSLUSM495S	Level, millions SAAR	↑ good
BBK Leading Index	BBKMLEIX	Index level	↑ good
Manufacturing Output YoY	IPMANSICS	YoY %	↑ good
Real GDP Per Capita YoY	derived	YoY %	↑ good

Some source series feed more than one pillar (the same series, normalized against pillar-specific bounds). "Direction" reads from the household's side: for Labor Leverage, ↑ good means good for workers.

From raw series to one score.

Two steps: indicators roll up into pillars, pillars roll up into the Macro IQ.

The formula

pillar_score = Σᵢ wᵢ · normᵢ(xᵢ) / Σᵢ wᵢ ∈ [0, 100]

norm maps each indicator linearly between a calibrated healthy bound and a stressed bound, then clamps to 0–100. The bounds are fixed, not rolling. A missing component drops out and the remaining weights re-normalize.

Labor Leverage and Industrial Pipeline are scored as strength (higher = stronger), so they enter the composite inverted as 100 − score.

Macro IQ = .25·AmDream + .20·Consumer + .20·(100−Labor) + .15·Fed + .10·(100−Industrial) + .10·Credit

These are the production weights from the live scoring config.production

Pillar weights & components

American Dreamhousing accessibility5 components25%

Consumer Resiliencysentiment vs. spending5 components20%

Labor Leverageinverted — worker strength5 components20%

Fed's Tightropemonetary policy stress5 components15%

Industrial Pipelineinverted — production strength3 components10%

Credit Pulsecredit market stress4 components10%

Within each pillar, component weights are also fixed in config — the table above lists each pillar's components in weight order.

Score → regime.

The Macro IQ maps to a named regime. One override sits above the score bands: sticky inflation plus softening growth is its own animal.

Score	Regime	What it means
override	Stagflation Risk	Triggers regardless of band when Fed's Tightrope ≥ 55, Industrial Pipeline ≤ 40, and Macro IQ ≥ 50. Inflation remains sticky while growth is softening - a difficult combination that limits the Fed's room to maneuver. Expect continued policy tension and compressed real returns.
≥ 62	Contraction Watch	Stress is broad-based and accelerating. Consumer confidence has collapsed, policy uncertainty is elevated, and leading indicators are deteriorating. The historical pattern at this reading resolves into contraction more often than not.
48–61	Late Cycle Caution	Growth is decelerating and stress is building across multiple funnels, but credit remains clean and labor has not broken. The economy is in a narrow window - soft landing is possible but requires conditions to stabilize soon.
38–47	Policy Pivot Window	The Fed has shifted posture and borrowing costs are falling. Growth is soft but not broken. How quickly policy transmission reaches households will define the next leg.
28–37	Soft Landing Track	Stress indicators are easing from their peak while labor holds broadly firm. The data is consistent with a soft landing, though the path remains narrow.
15–27	Mid-Cycle Growth	Growth is solid and balanced across indicators. No single sector is flashing warning signs. The cycle appears mid-stage with room to run.
0–14	Early Expansion	Conditions are broadly constructive - stress is low, credit is clean, and labor holds bargaining power. The expansion has significant room to run.

Design decisions

I score stress, not health. People ask "how bad is it?" — so the score rises when risk rises. It also keeps the composite honest: a hot labor market and a hot inflation print push in opposite directions instead of averaging into a bland middle.

The bounds are fixed, not rolling. Rolling z-scores quietly rewrite history every month — a given score today wouldn't mean what it meant years ago. Fixed calibration bounds keep readings comparable across cycles, at the cost of needing an occasional deliberate re-calibration.

Credit is only 10% of the weight — but it's the late-cycle veto. Spreads and delinquencies say almost nothing mid-cycle, then say everything at the turn. Rather than inflate the weight permanently, the regime layer does that job: clean credit is what separates Late Cycle Caution from Contraction Watch.