UBS gives America a recession check-up and sees a 93% probability from the hard data, with a ‘soggy’ economy ahead

Key findings

Aggregate recession risk

The other recession calls

Nick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.

There are certain words you don’t want to hear in a medical checkup, or in an investment bank’s recession outlook: “stable but elevated.” It’s a phrase that could refer to blood pressure, even risk of a heart attack, a favorite metaphor of hedge-fund legend Ray Dalio, or in UBS’ evaluation, risk of a recession.

The bank found that from May through July, the “hard data” from the U.S. economy has shown an elevated risk level, standing at a probability of 93% most recently. This sits at “historically worrying levels,” UBS says, given this signal’s track record of identifying turning points using data from the National Bureau of Economic Research.

The bank notes other classic warning signs of an impending recession from the data, such as the inverted yield curve, which it notes is 23% inverted, steady in recent months but up sharply since the start of 2025. Based on building stress in

Fortune’s reporting throughout 2025 has outlined mounting warning signs the U.S. is headed toward a recession, echoing and expanding on the UBS research note’s findings. But when UBS zooms in to the hard data, it finds that while most metrics are turning negative, it’s more in a “mile wide inch deep” kind of “malaise.” None of the hard series of data is showing “signs of rapid unraveling,” according to the team led

The UBS analysis of “hard data” reflects the bank’s own proprietary factor model, which relies on objective, non-survey-based economic indicators such as personal income, consumption, industrial production, and employment data. It filters out sentiment surveys, purchasing manager indexes (PMIs), and financial market signals.

After a brief recovery at the end of 2024, the hard data signal tipped decisively back into negative territory starting in February 2025. The sideways movement since May suggests sustained weakness rather than any new acceleration downwards. According to the note, none of the major hard economic series were showing the kind of sharp, downside deviation (such as more than one standard deviation below trend) typically seen directly ahead of past recessions.

The key message is the US economy,

Despite the elevated risk, UBS’s economics team is not formally forecasting a recession, but rather expects “soggy growth” followed

UBS averaged the hard data together with inverted yield curve and

Mark Zandi, chief economist for Moody’s Analytics, warned in early August the U.S. was on the precipice of a recession, citing much of the same hard data as UBS. Zandi argued the major revisions downward in the July report recalled earlier inflection points before recessions, when he sees revisions as much likelier due to swings in economic activity.

Zandi’s remarks followed a similar warning from JPMorgan, which said it has “consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal … In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.”

In the weeks since, Zandi has voiced concerns over the coming winter of 2025/2026 as the time of greatest vulnerability, putting the odds of a recession at 50-50. Within a few days, Zandi argued states accounting for almost one-third of GDP were either in recession already or at risk of it.