Doom Score drops to 27 as labor stress fades, oil and housing linger
By Alex · Doom Watcher analyst
The composite score fell three points to 27, crossing from Caution into All Clear, as labor-side indicators continued to improve and credit stress eased. Energy Price Shock and Home Construction remain the heaviest drags. Kalshi trimmed recession odds five points on the week; Polymarket held steady.
By the Numbers
The Doom Score closed at 27, down three points from yesterday's 30, crossing the Caution threshold back into All Clear. The 7-day average is 29; the 30-day average is 31.5; the 90-day maximum was 38 — meaning today's reading sits at the low end of the recent range. Core 6 sub-score prints at 17.26, a notably subdued reading that reflects near-zero activation across Financial Conditions, Yield Curve, and Weekly Layoff Filings. Diffusion Index at 41.18 means roughly four in ten tracked indicators are deteriorating on a 90-day basis — a minority, but not a trivial one. Top weighted contributors are Home Construction, Consumer Confidence, Energy Price Shock, Months Supply of Houses, and Real Income. The stress is concentrated in housing and consumer-facing channels, not in the credit or labor-market plumbing that typically leads recessions.
What Changed Today
The three-point drop was driven primarily by continued improvement in labor indicators. Unemployment Pace activation sits at just 26%, trend improving. Weekly Layoff Filings printed 203,250 — activation at zero, trend improving. Temp Worker Cuts improved to 52.6% activation. Consumer Credit Stress eased to 17.6% activation, trend improving. Trade Policy Uncertainty activation fell to 17.8%, also improving. On the other side, Energy Price Shock held at 100% activation with a worsening trend, and Consumer Confidence activation remains elevated at 125% — the only indicator breaching its ceiling. Real Income worsened marginally. No Tier 1 indicator deteriorated. The net picture is a dashboard where the high-frequency labor and credit signals are clearing, while slower-moving structural indicators — housing supply, energy costs, consumer sentiment — continue to apply upward pressure.
News Drivers
The dominant macro backdrop is the Iran conflict disrupting Strait of Hormuz shipping, which maps directly onto Energy Price Shock's 100% activation and worsening trend. With the White House holding limited tools to relieve pump prices, that indicator is unlikely to ease quickly. Venezuela's $150 billion debt restructuring adds a secondary layer of EM risk sentiment pressure, though its direct footprint on the dashboard is modest given low activation in credit and financial conditions indicators. Cisco's 11% surge on AI-driven earnings beat provided a counterweight, supporting the near-zero readings in Financial Conditions and High-Yield Spread. Kalshi's 2026 recession probability fell to 18% from 20% a week ago; Polymarket held at 22.5%. Neither market is pricing material contraction risk. Google Trends data was unavailable for today's snapshot.
Historical Context
At 27, the score sits two points below the 7-day average of 29 and 4.5 points below the 30-day average of 31.5. The 90-day maximum of 38 was reached during a period of sharper trade and credit stress; today's reading represents a meaningful retreat from that peak. Scores in the mid-to-high 20s are historically consistent with soft-patch conditions rather than recession onset — the 2015-2016 industrial slowdown and the mid-2019 pre-cut window both saw extended periods in this band. What distinguishes the current configuration is the unusual combination of a clean labor market and credit picture alongside persistent housing-supply stress and an energy shock with a geopolitical rather than demand-driven origin. That mix has fewer clean historical analogues.
What to Watch
Energy Price Shock at 100% activation is the indicator with the least room to worsen further but the most geopolitical dependency — any escalation in Hormuz transit disruption would entrench it. Consumer Confidence at 125% activation and worsening trend is the most stretched reading on the board; a further deterioration in the Conference Board or Michigan series would add weighted pressure. On the labor side, Unemployment Pace at 26% activation and improving is the key stabiliser — a Sahm-style acceleration would be the single fastest route back toward Caution. Months Supply of Houses at 8.5 months remains well above the 6-month equilibrium threshold. Upcoming housing starts and existing home sales data will test whether the supply overhang is stabilising. A score move back above 30 would reinstate the Caution alert level.