A Payroll Playbook to Gauge Recession Risk

Hussman Funds

Bill Hester

Research

18 Pages

Bill Hester lays out a payroll based framework for reading recession risks from upcoming jobs reports.

Date published: November 2025

Key Takeaways

Recession signals: A composite of recession sensitive sectors has turned negative, a configuration rarely seen outside periods near recession.
Cyclical sectors: Construction and manufacturing payrolls are contracting together, historically an early warning that broader job losses may follow.
Market implications: If recession arrives from this backdrop, elevated valuations raise the odds of longer, more volatile, recession linked equity declines.
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