Methodology

What Is This Dashboard?

The US Recession Risk Dashboard tracks key economic indicators published by the Federal Reserve Bank of St. Louis (FRED) to give a clear, data-driven picture of the health of the US economy. Rather than simply reporting raw numbers, the dashboard synthesizes 27 data series across six economic categories into a single, easy-to-read scorecard — making it clear at a glance whether conditions are Healthy, showing signs of Caution, or raising an Alert.

The dashboard is built for anyone who wants to understand the direction of the US economy without wading through government data releases or financial news noise. It updates automatically on weekdays using fresh data from the FRED API and AI-generated analysis from Anthropic's Claude.

The Core Question

The central question this dashboard is designed to answer is: is there a disconnect between the stock market and the average American consumer?

Stock markets can rise — and stay elevated — even when consumers are under serious financial stress. Credit card delinquencies climb, real wages stagnate, consumer sentiment falls, and retail spending slows, yet the S&P 500 continues to reach new highs. This divergence matters because prolonged disconnects often precede economic corrections, and because the headline narrative (markets are up, so the economy is fine) can mask real stress in household finances.

The Disconnect Chart at the top of the dashboard places the S&P 500 and the University of Michigan Consumer Sentiment Index on the same scale, both indexed to 100 from the same starting date. When the two lines diverge, the disconnect is immediately visible — no interpretation required.

How the Dashboard Is Organized

The dashboard organizes its 27 indicators into six thematic sections, each covering a distinct dimension of economic health:

• Recession Signals — Leading and coincident indicators with strong historical track records for flagging recession risk: the yield curve (10-year minus 2-year and 10-year minus 3-month Treasury spreads), the Sahm Rule, and the Chicago Fed National Activity Index (CFNAI).
• Consumer Health — How financially stressed are US households? This section tracks consumer sentiment, real disposable income, retail sales, credit card and consumer loan delinquency rates, and the share of cardholders making only minimum payments versus paying their balance in full. The "credit card payment barbell" — minimum payers rising while full payers fall — is an early signal of K-shaped financial pressure.
• Labor Market — The job market is the backbone of consumer financial health. This section covers initial jobless claims, the unemployment rate (U-3 headline and U-6 broad), nonfarm payroll growth, JOLTS job openings, and the job openings-to-unemployed ratio — a direct measure of whether workers or employers currently hold the upper hand.
• Markets & Financial Conditions — Beyond the S&P 500, this section tracks broader financial stress: the Chicago Fed National Financial Conditions Index (NFCI), high-yield and BBB corporate bond spreads, the federal funds rate, and the 30-year mortgage rate spread. Widening credit spreads and tightening financial conditions often precede economic downturns.
• Inflation — Price stability sits at the center of the Fed's dual mandate. This section tracks Core PCE (the Fed's preferred inflation measure) and CPI, both on a year-over-year basis, and flags when inflation is running hot enough to constrain monetary policy.
• Growth — The broadest measure of economic output. GDP growth on an annualized quarter-over-quarter basis anchors this section. Negative GDP growth is the most widely recognized marker of recession.

How the Scoring Works

Each indicator is evaluated against research-calibrated thresholds and assigned one of three statuses:

• ✓ HEALTHY   The indicator is within normal range and does not suggest elevated recession risk.
• ⚠ CAUTION   The indicator has moved into a range historically associated with economic slowdowns or elevated risk, but has not yet reached recession-level territory.
• ✗ ALERT   The indicator has crossed a threshold historically associated with recession onset or active financial stress.

Section-level status rolls up from individual indicator statuses using rules calibrated for each section. For example, the Labor Market section requires two or more indicators to be in caution or alert before the section status reflects that, because individual indicators like payroll growth fire false caution signals in roughly a quarter of historically healthy months. Thresholds are anchored to post-2009 data regimes where appropriate, since the structural changes following the Global Financial Crisis make pre-2009 norms an unreliable benchmark for several series.

Scored indicators are marked with a ★ in their chart title. The dashboard deliberately distinguishes between scored indicators — those that feed into section status — and context-only indicators that appear on charts for interpretive value but do not affect scoring.

AI-Generated Analysis

Each section, and the hero disconnect chart, includes a written narrative generated by Anthropic's Claude AI. The narrative receives the current data values and section status, and translates them into plain-English context — explaining not just what the numbers say individually, but what they mean together and how conditions compare to historical patterns.

Only anonymized economic data values are sent to the Claude API for narrative generation. No user data or personally identifiable information is ever transmitted. AI narratives are regenerated automatically when new FRED data is available, and are clearly labeled with a ✦ AI Analysis marker throughout the dashboard.

Data Sources and Update Schedule

All economic data is sourced from the Federal Reserve Bank of St. Louis (FRED) API. FRED is the most comprehensive and reliable source of US macroeconomic data, covering thousands of series from government agencies including the Bureau of Economic Analysis, the Bureau of Labor Statistics, the Federal Reserve, and more. All data on this dashboard is publicly available and free to access.

The dashboard updates automatically on weekdays when new FRED data is published. Not all indicators update at the same frequency — GDP is quarterly, most labor and consumer data is monthly, and market and financial conditions data is daily or weekly. The dashboard always shows the most recent available observation for each series, so some indicators will reflect more recent readings than others at any given time.

Charts display up to 10 years of history by default. All charts include shaded regions marking NBER-designated recession periods, providing historical context for how current readings compare to past downturns. Chart data can be zoomed and panned interactively.

About This Site

The US Recession Risk Dashboard is an independent economic monitoring site published at FREDEconDashboard.com and maintained by BitByCode. It is not affiliated with the Federal Reserve Bank of St. Louis or any government agency.

Questions, feedback, or data corrections are welcome at FRED@bitbycode.com, or browse the FAQ for answers to common questions.