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Will there be a recession?

Indicators IQ's model puts 12-month recession risk at 31% as of July 2026, with the overall Macro IQ stress score at 56/100. Here's the forward-looking picture.

The July 2026 Outlook Read · Late Cycle Caution

Growth is decelerating and stress is building across multiple funnels.

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.

Recession risk 31% Yield curve 0.69% Sentiment 44.8
Data through July 2026 · Refreshed Jul 28, 2026 · Sources: FRED, BEA
Macro IQ · composite stress across the whole economy
56/100
Elevated Stress
0 · Stable100 · Crisis
Since 2023peak 65 · Dec 2025
12-month forward risk estimate · Built from 32 indicators across six areas. See the full breakdown →
Recession Risk
31%
Watch Zone12-mo forward
10Y–3M Yield Curve
0.69%
July 2026
Consumer Sentiment
44.8
-5.0July 2026
Jobless Claims
187K
July 2026
Savings Rate
3.0%
July 2026

What's driving the score.

Six areas of the economy, each scored 0–100. Higher means more stress.

Housing
High Friction
 67 Consumer
Watch Zone
 61 Labor
Balanced
 56 Monetary
Mildly Restrictive
 41 Industrial
Slowing
 49 Credit
Healthy
 13

The yield curve since 2021.

The 10-year minus 3-month Treasury spread. Below zero — inverted — has preceded every US recession since the 1960s.

10Y–3M Treasury spread 0% inversion line

AI Signal Synthesis

The Composite Macro IQ has moved 3 points over the last 36 months, driven primarily by weak sentiment, housing strain, and industrial softness. The rise has been cumulative rather than abrupt. The main tension remains soft confidence against still-positive spending, which typically resolves through weaker demand rather than a fresh acceleration.

What to watch next.

Jul31 PCE Inflation report. Watch for core PCE to confirm whether the uptick to 3.41% reflects a genuine reversal or noise. The Fed targets 2% on this measure.
Aug7 Nonfarm Payrolls report. The 57,000 print was weak. A rebound above 150,000 would ease recession fears; another decline would deepen labor market concerns.
Jul29 GDP release. Current growth stands at 2.10%. A slowdown here combined with weak jobs data could force the Fed to cut rates sooner than expected.

Quick answers.

The questions people actually ask about where the economy is headed, answered from the data above.

Will there be a recession in the next 12 months?
Indicators IQ's recession model puts 12-month forward risk at 31% — watch zone. Mixed signals - growth is intact but headwinds are building.
What is the yield curve saying right now?
The 10-year minus 3-month Treasury spread is 0.69%. An inverted (negative) curve has preceded every US recession since the 1960s; the curve is currently positive, which historically points away from imminent recession.
How do consumers feel about the economy?
Consumer sentiment sits at 44.8 — depressed by historical standards — while households save 3.0% of income and initial jobless claims run at 187K a week. People feel worse than the hard data looks.
What is the Macro IQ score?
A 0-100 composite stress score built from 32 indicators across six areas of the economy — higher means more stress. The current read is 56 (elevated stress), and the regime call is “Late Cycle Caution”.