A recent model that analyzes economic sentiment from the Federal Reserve’s Beige Book estimates a 24 percent chance that the United States was in recession as of October 2025. However, researchers at the Federal Reserve Bank of Cleveland caution that this model has become less reliable in recent years.
The model, which historically made accurate predictions using Beige Book sentiment data from the mid-1980s through 2021, now shows a weaker relationship between reported sentiment and actual recessions. The Beige Book compiles qualitative reports on economic conditions from business and community leaders across all 12 Federal Reserve districts.
According to new research by Christian Garciga and James Mitchell of the Cleveland Fed, “Measures of uncertainty have been especially elevated and volatile since 2021.” They note that this heightened uncertainty aligns with increased volatility in Beige Book sentiment, possibly reflecting ongoing debates about interest rates, trade policy, and what they describe as “the generally unusual nature of this expansion.”
The analysis found that despite continued economic growth since mid-2022, economic sentiment in the Beige Book has turned notably more negative. On three occasions during this period, the model indicated recession probabilities above 50 percent without an actual recession occurring.
“Like consumers, business and community leaders have felt the ‘vibecession,’” write Garciga and Mitchell.
The Cleveland Fed is one of twelve regional banks within the Federal Reserve System. It serves Ohio, western Pennsylvania, eastern Kentucky, and northern West Virginia through its main office and branches in Cincinnati and Pittsburgh. The bank contributes to monetary policy decisions, supervises financial institutions, provides payment services for banks and the US Treasury, and supports local communities through research and outreach programs.
Further details can be found in their Economic Commentary: Forecasting US Recessions in Real-Time Using Regional Economic Sentiment. Additional context is available at How well does the Beige Book predict recessions?
