Regime Detail — Transitions & Historical Analogs
Where is the economy headed? Transition probabilities, indicator divergences, and the historical periods that most resemble current conditions.
Transition Outlook
| Regime | 3 months | 6 months | 12 months |
|---|---|---|---|
| expansion | 42.0% | 66.0% | 86.2% |
| late cycle | 52.8% | 23.0% | 7.2% |
| slowdown | 2.6% | 7.6% | 4.5% |
| contraction | 1.7% | 2.8% | 1.4% |
| reflation | 0.9% | 0.7% | 0.6% |
Indicator Divergences
Consumer sentiment and leading index diverging: sentiment at 0p, leading at 77p
Building permits and industrial production diverging: permits at 42p, production at 91p
Sahm rule and initial claims diverging: Sahm at 51p, claims at 11p
Housing starts and permits neutral: starts at 9p, permits at 42p
VIX and credit spreads neutral: VIX at 39p, spreads at 8p
Fed funds and HY spread neutral: fed funds at 64p, spread at 8p
Yield curve 10Y-3M and leading index confirming: curve at 58p, leading at 77p
VIX and unemployment confirming: VIX at 39p, unemployment at 54p
Credit spreads and consumer sentiment confirming: spreads at 8p, sentiment at 0p
Yield curve and unemployment confirming: curve at 50p, unemployment at 54p
Historical Analogs
| Period | Distance | Recession followed? |
|---|---|---|
| 1981-04-01 | 0.177 | Yes — in 4 months |
| 2025-01-01 | 0.179 | No (within 24m) |
| 1981-11-01 | 0.206 | No (within 24m) |