Model based on Beige Book text predicts a 24% chance of recession – but has been choppy lately

A model that uses economic sentiment extracted from the Beige Book to forecast recessions suggests there is a 24 percent chance that the US economy was in recession in October 2025, although this assessment is less reliable than in previous decades.

The model made accurate forecasts based on Beige Book sentiment from the mid-1980s through 2021, but since then, the relationship between  Beige Book sentiment  and recessions appears to have broken down, according to new Cleveland Fed research.

The Beige Book provides qualitative descriptions of economic conditions in all 12 Federal Reserve districts, based on firsthand reports from business and community leaders. The analysis reveals that their economic sentiment has been notably more negative in tone since mid-2022, despite continued economic growth. Thus, in three instances the model produced recession probabilities exceeding 50 percent, but a recession did not materialize.

What explains the disconnect between Beige Book sentiment and traditional economic measures, like GDP?

Economic uncertainty may play a role, according to the report’s authors, Christian Garciga and James Mitchell.

Measures of uncertainty “have been especially elevated and volatile since 2021,” they write. That uncertainty correlates with volatility in Beige Book sentiment and may capture the impact of public discussions on interest rates, trade policy and “the generally unusual nature of this expansion,” they write.

“Like consumers, business and community leaders have felt the ‘vibecession,’” they write.

Read the Economic Commentary: Forecasting US Recessions in Real-Time Using Regional Economic Sentiment

Further reading: How well does the Beige Book predict recessions?