Four stages of an economic cycle, read from the three gauges from State of the Economy by fixed rules. Every period since 1981 listed, with what followed. Counts, never probabilities.
The page reads the gauges as they stood at the time — the point-in-time record, not the revised one.
In the record: 10 Expansion periods since 1981 · 2 became a Contraction within 18 months · 8 did not.
S&P 500 price, log scale, month-end. Stages on the point-in-time basis: the gauges as they read at the time. The “what followed” figures on this page — through each period, the twelve months after it, and the stress register’s returns — are measured on the S&P 500 total-return chain, dividends reinvested, not on the line above. Opens on the last 20 years; the full record is in the full-size view — scroll to zoom, drag to pan.
Momentum below 30, or below 40 while falling with Forward Stress under 40 — the one stage Forward Stress helps name.
Every one of the 7 sits inside an NBER recession. S&P 500 in the 12 months after: median +11.3%, range -23.9% to +38.1%.
The months after a Contraction, while Momentum is climbing off its trough and has not yet reached 60.
2 of 6 became a Contraction within 18 months. S&P 500 in the 12 months after: median +13.7%, range -21.4% to +42.9%.
Momentum at or above 45 and not falling into a Slowdown — the gauges say the economy is growing.
2 of 10 became a Contraction within 18 months. S&P 500 in the 12 months after: median +19.6%, range -13.5% to +50.0%.
Momentum below 50 and not rising, or below 45 — growth has stepped down without the gauges calling it a contraction.
4 of 10 became a Contraction within 18 months. S&P 500 in the 12 months after: median +13.2%, range -40.9% to +30.2%.
It fires when Forward Stress sits 20 points or more below its own 12-month high while Momentum is at or above 50, and it stops when Forward Stress climbs back within 10 of that high or the stage leaves Expansion. It never names the stage; it is reported beside it.
6 firings since 1981: 3 preceded a Contraction within 18 months (2000, Sep 2000; 2006, Dec 2006; 2019, Feb 2019); 3 did not (Sep 1984, Feb 1989, Jun 2022). Counted against the site's own Contraction periods.
| Opened | Closed | Months | What followed | S&P 500, next 12 months |
|---|---|---|---|---|
| Sep 1984 | May 1985 | 9 | no Contraction within 18 months | +15.7% |
| Feb 1989 | Jul 1989 | 6 | no Contraction within 18 months | +16.1% |
| Sep 2000 | Jan 2001 | 5 | a Contraction began within 18 months | -27.9% |
| Dec 2006 | Jun 2007 | 7 | a Contraction began within 18 months | +6.3% |
| Feb 2019 | Oct 2019 | 9 | a Contraction began within 18 months | +21.2% |
| Jun 2022 | May 2023 | 12 | no Contraction within 18 months | +13.3% |
Since publication (Sep 2026): no firings yet.
The four rules, the persistence and exit thresholds, the inflation overlay, the stress signal and the adjudication behind it: methodology →