February 20, 2026

An Update on US Recession Indicators

An Update on US Recession Indicators

Early last year, we flagged research that pointed to a probable recession in the United States in 2025. While there was plenty of turmoil last year, particularly after Trump announced stinging global trade tariffs, the economy remained resilient. The lack of follow-through on the proposed tariffs, in combination with a steady labour market and strong

by Dejan Pekic

20

February 2026

An Update on US Recession Indicators

Posted by Dejan Pekic

Early last year, we flagged research that pointed to a probable recession in the United States in 2025. While there was plenty of turmoil last year, particularly after Trump announced stinging global trade tariffs, the economy remained resilient. The lack of follow-through on the proposed tariffs, in combination with a steady labour market and strong corporate performance, particularly in the AI sector, helped fend off any recession.

So what does the picture look like for 2026?

There are 12 variables that can point to the likelihood of a recession. As of January 2026, these consumer, business activity and financial variables are suggesting the US economy remains in a state of expansion, at least for the first half of 2026.

According to the ClearBridge Investments Recession Risk Dashboard, there is a solid overall expansionary green signal (suggesting immediate growth). While most indicators remained stable from December to January, there was improvement in the ISM New Orders indicator, which marks new manufacturing activity. That, in combination with OBBB tax-refund fiscal tailwinds (the OBBB was introduced into US law in July 2025, with tax cuts designed to boost US consumer spending), is helping ward off a significant downturn.

It is important to remember, however, that we remain in a bull market. While US stocks have rebounded from last year’s volatility to hit new highs already this year, policy and global shifts may impact that position, and a correction will occur at some stage.

We can’t predict the exact timing, severity or length of the next recession in the US or in Australia, but a recession will affect asset prices when it happens. Downturns may cause panic, but they also provide a prime opportunity for investors, helping you acquire quality assets at discounted prices.

Click for US Recession Risk Indicators.

At Newealth, we stay on top of key financial trends to help you make informed financial decisions. For strategic investment advice, we’re here for a confidential discussion.

 

General Advice Warning:

The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
Newealth Pty Ltd ABN 61 091 100 275 | AFSL 231297

Related Posts

  • The $10 Trillion Energy Build-Out Quietly Taking Shape

    Last December, we wrote about the surge in global grid investment driven in part by AI data centres. The picture that has emerged since is even larger than the headline numbers suggested. ARK Invest’s recently released Big Ideas 2026 report puts a figure on it. To meet projected global electricity demand by 2030, cumulative global

    Published On: June 12th, 2026By

  • The Great Acceleration: A New Investment Cycle Takes Shape

    A new report from ARK Invest, Big Ideas 2026, makes a striking case that the world is entering one of the largest technology investment cycles in modern history. Looking back across 170 years of capital expenditure data, from the railroads of the 1860s to electrification, cars, computers and the software boom, ARK shows that each

    Published On: June 5th, 2026By

  • EOFY Tax Planning Checklist: What to Tick Off Before 30 June

    Before June 30: The EOFY Financial Decisions That Actually Matter Webinar · Thursday 11 June 2026 · 5:00 pm AEST The checklist below gives you the framework. But knowing what to tick off and knowing whether it makes sense for your situation are two different things. In this session, Dejan Pekic from Newealth and Jane

    Published On: May 29th, 2026By

Sign Up

Sign up to receive clear insights on market trends, along with practical financial, investment and lifestyle guidance to help you make confident decisions.

Newealth helps professionals, executives and families plan, invest and protect their long-term financial future.

The CFP® Certification Program is the highest designation in financial planning worldwide. It comes coupled with commitment to the highest ethical standards and sets CFP® professionals apart from the rest.

Address
Level 10, 276 Pitt Street
Sydney NSW 2000
P: +61 2 9267 2322

General Advice Warning: The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Go to Top