Not financial advice. All content on FinanceCompass is for informational and educational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell any security. Always do your own research and consult a licensed financial professional before making investment decisions.
Free · Macro

Recession Signal Tracker

Seventeen indicators across three analytical layers — what households are actually experiencing (Cleveland Fed inflation, full-employment wages, savings rate), what the Fed's official models show (yield curves, NY Fed probability, credit spreads), and shadow banking credit conditions — with independent AI synthesis updated daily from FRED.

What You Are Actually Experiencing
Median CPI · Cleveland FedGreen
2.1% YoY
FRED: MEDCPIM158SFRBCLE · Strips BLS distortions · Includes food & energy
0%4%8%20222023202420252026
The median price change across all CPI categories — the cost of living at the 50th percentile. Unlike the BLS headline, it does not exclude food and energy, does not apply geometric substitution adjustments, and does not smooth out shelter costs through Owner's Equivalent Rent lag.
Full-Employment Real WageGreen
+0.9%
Adj. weekly earnings YoY × 82.5% FT share − Median CPI = Wages outpacing inflation
-6%-4%-2%0%2%20222023202420252026
Average weekly earnings growth, weighted by the full-time share of the workforce (82.5%), minus Cleveland Fed Median CPI. A negative reading means the average household is losing purchasing power regardless of what nominal wage statistics claim. This is the number that explains why people feel broke when the official data says otherwise.
Wages vs. Inflation — 5-Year History
0%+2%+4%+6%+8%20222023202420252026Adj. Wage GrowthMedian CPI (Cleveland Fed)
These are the two raw inputs the Full-Employment Real Wage card above synthesizes into a single line: adjusted wage growth minus Median CPI. When the green wage line rides above the yellow CPI line, the spread is positive and the real wage card reads green. When CPI climbs above wages, the spread turns negative, households lose purchasing power month over month, and the card turns red. The two charts are the same story; this one shows the gap, the card above measures it.
Personal Savings Rate — 5-Year History
4.1%
2%4%6%8%202220232024202520267% historical norm4% warning threshold
The share of disposable income that households are not spending. A declining savings rate means households are drawing down reserves to maintain their standard of living. When it approaches zero, there is no cushion left — the next shortfall goes on a credit card.
Revolving Consumer Credit vs. Pre-Pandemic Baseline — 5-Year History
+26.1% vs. pre-pandemic
-10%-5%00%+5%+10%+15%+20%+25%+30%20222023202420252026Jan 2020 baselineabove pre-pandemic level (worse)
Revolving credit is predominantly credit card balances — the debt households reach for when income does not cover expenses. The zero line is January 2020. Every month above it represents debt taken on since the pandemic. A return to positive real wages does not retire this balance; it only slows its growth. Full recovery requires wages to outrun inflation by a meaningful margin, for long enough to retire what was borrowed.
Real Disposable Personal Income — 5-Year History
+1.3% YoY
-25%-20%-15%-10%-5%0%+5%+10%202220232024202520262% healthy growth0% = real purchasing power shrinking
Real (inflation-adjusted) disposable income — what households actually have left after taxes and after inflation takes its cut. This is the number that determines whether living standards are rising or falling regardless of what nominal income figures show. When this is negative, households are losing ground in real terms even before accounting for debt service on the credit they have already taken on.
The wage, inflation, savings, and debt data above explain the reading below.
Consumer Sentiment — 5-Year History
51.7
Red
40506070802022202320242025202680 — stress zone60 — recession territory
The University of Michigan Consumer Sentiment Index is the leading indicator with the most direct predictive weight in this entire tool. Sentiment leads spending decisions by 3–6 months, spending leads corporate revenue, revenue leads hiring and layoffs. When consumers lose confidence, the rest of the economy follows — typically with enough lag that the official data looks fine right up until it doesn't. The data above this chart is why it reads the way it does. This chart is what comes next.
The Fed's Official Picture
Traditional leading indicators & official models
12-Month Recession Probability · Estrella-Mishkin Probit Model
13.5%Low
▼ 15.1 pts vs 1 year ago
Based on 10yr−3mo spread: +0.90%
2010201520202025
13.5% — Low
LowModerateElevatedHigh
0%15%30%60%100%

Values above 30% have historically been consistent with U.S. recession onset within 12 months. This model has correctly signalled every recession since 1968 using the yield curve spread alone, with an average lead time of about 6 quarters. The Chauvet-Piger model (signal card below) uses a broader set of coincident indicators.

22LOW RISK0100
1 red · 2 yellow · 6 green
Credit Channel
Shadow Banking Monitor
Shadow banking — private credit funds, hedge funds, CLO vehicles, money-market conduits, and broker-dealers — controls an estimated $60–70 trillion in global assets, rivaling the entire traditional banking system in scale. These entities operate with no deposit-insurance backstop, no reserve requirements, and no automatic access to Federal Reserve emergency facilities. That opacity is structural and intentional. But when shadow banking comes under stress, it does not absorb losses quietly: the 2008 financial crisis was fundamentally a shadow banking run — repo markets seized, money-market funds broke the buck, and ABS pipelines collapsed — with catastrophic and rapid spillover into the regulated economy. The two indicators below are the clearest available real-time window into credit conditions across both channels.
Bank Credit GrowthGreen
+6.0% YoY
FRED: TOTBKCR · Total commercial bank credit
20222023202420252026
Year-over-year growth in total credit extended by U.S. commercial banks. Contraction has historically coincided with — or immediately preceded — recession. When shadow banking simultaneously tightens, the combined credit withdrawal compounds the downturn far beyond what either channel signals alone.
C&I Lending StandardsYellow
Neutral
FRED: DRTSCILM · Quarterly · Data as of Jul 2026
20222023202420252026
Net percentage of domestic banks tightening C&I loan standards (Senior Loan Officer Survey). Bars above zero = tightening; below = easing. Readings above +25% have preceded every modern U.S. recession by 2–4 quarters. Shadow credit funds typically amplify — not cushion — bank tightening cycles, cutting off borrowers that banks shed first.
What This Actually Means
Independent synthesis — fed every data source above
Independent Analysis
MACROECONOMIC ANALYSIS — 2026-10-09

Consumer finances are deteriorating beneath a veneer of stable labor markets: real disposable income is barely outpacing inflation at +1.3% YoY, the personal savings rate has collapsed to 4.1% (down from the 7% historical norm), and revolving credit has surged 26.1% above pre-pandemic levels — a behavioral signature of households funding consumption through debt rather than income. The trajectory is unsustainable because the arithmetic of debt accumulation and savings depletion exhausts itself; households cannot perpetually borrow to maintain consumption once savings buffers are gone and credit card balances reach service limits. If this path continues without reversal, household consumption slows materially within 12–18 months as credit availability tightens and debt service obligations crowd out discretionary spending, triggering a demand shock that will ripple through payroll growth and credit markets. The official recession score of 0.6% reflects traditional yield-curve and labor-market indicators, which remain resilient today, but those same indicators have historically failed to detect demand-driven recessions until consumption actually rolls over. The data reveals a consumer on financial life support — labor income is real but insufficient, savings are being drained, and credit is being stretched — which means the recession risk score is artificially low because it measures today's employment, not tomorrow's ability to spend.

Data as of Sep 1, 2026 · Source: FRED (Federal Reserve Bank of St. Louis)Refreshed · 7:20 PM UTC

Thresholds are heuristic guidelines based on historical patterns, not a mechanical rule for predicting recessions. Signal status reflects where each indicator stands relative to historical norms — not a guarantee of future conditions. Grey bands on charts indicate NBER-defined U.S. recession periods. This tool is for informational purposes only and does not constitute investment advice.

Signal thresholds are heuristic guidelines based on historical patterns. This tool is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security.