GlossaryUS Macro Phase Score
US Macro Phase Score
The score condenses four US macro series into a single number between 0 and 1: industrial production, the labor market, the yield curve and inflation. Each component is mapped to 0 to 1 so that high always means favorable. Above 0.75 the US economy is in a clear expansion, below 0.25 it is at risk of recession.
How to read it
- Level: tells you which phase the US economy is currently in.
- Direction: A score falling from above 0.75 toward 0.5 shows a cooling before the phase changes.
- Keep the components in mind: An inverted yield curve pushes the score down even if growth and the labor market are still strong, as from 2022 to 2024. High inflation pushes it down too, in a boom just as in stagflation.
Limitations
- Monthly figures with a delay: Industrial production, the unemployment rate and consumer prices sit on their reporting month but come out weeks later. At the right edge, the latest month is therefore often missing, and in the history each value already stands from the first of its reporting month.
- Fixed thresholds: The mappings are calibrated to US history: 3.5% unemployment as full employment, ±8% industrial production as an extreme. In a different economy or a different regime, they do not fit.
- Timeframe: Meant for 1D, 4D and 1W.