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Are we in a recession (yet)?

Consulting Chauvet and Piger's smoothed probabilities

It’s natural to want to know where you stand in the economy and get ahead of any big changes. It’s no surprise, then, that we’re hearing plenty of talk about whether the U.S. economy is in a recession.

As usual, we begin our inquiry with FRED data! The graph above displays, month after month, the estimated probabilities that the U.S. economy is in recession. These estimates are calculated from a set of economic statistics discussed in this article. The FRED graph also conveniently displays shaded bars when actual recessions occurred, as determined by the NBER business cycle dating committee. And the match up is astonishingly good! (For a deeper analysis, see this article.)

So, are we in a recession or not? You can judge for yourself; but at the time of this writing, the June 2022 data do not seem to indicate a recession.

Keep in mind that economic data can take a little while to arrive, conditions can quickly change, and our current economic situation is certainly different from previous ones. Thus, we can’t exclude the possibility that the model may be off target this time, but we can consider our own sense of the probability of that being true.

How this graph was created: Search FRED for “recession probabilities.”

Suggested by Christian Zimmermann.



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