Oil Shocks and US Recessions: The 4%-of-GDP Burden Threshold (1970–2026)

Since 1970, every completed US oil shock with a peak burden above ~4% of GDP was followed by an NBER recession within 18 months. Episodes below that threshold (2000, 2011, 2022) were not. The 2026 Iran War shock peaked at 2.6% of GDP and remains ongoing — its outcome is not yet observable. Source: FRED (WTI, CPI-U, GDP), EIA Monthly Energy Review, NBER Business Cycle Dating Committee.

???? Eco3min — The Oil Burden Index (1970–2026)

The consensus reaction to the 2026 oil price spike has followed a familiar script. Within days of the Strait of Hormuz crisis, mainstream outlets revived the James Hamilton canon — that ten of the eleven post-WWII US recessions were preceded by a major oil shock — and financial commentary converged on a single narrative: another recession is coming. The logic is intuitive. Oil shocks compress real incomes, feed into headline inflation, and force central banks to tighten. This analysis re-examines that script through a single metric: the oil burden — the share of US GDP spent on petroleum at prevailing prices. Over the 1970–2026 window, every completed oil shock with a peak burden above approximately 4% of GDP has been followed by a US recession within eighteen months. Every completed shock that peaked below that threshold has not. The 2026 episode, even at its intraday peak of USD 117.63 per barrel, pushed the burden to roughly 2.6% of GDP — the lowest ceiling of any shock in the series. The episode remains open, and any conclusion about its eventual outcome is conditional on the price trajectory holding from here. What the data establish is narrower: the conditions under which past oil shocks have produced US recessions are not, as of April 2026, present in this one. Two structural shifts explain why a $117 barrel today is not the same shock a $117 barrel would have been in 1980: US petroleum intensity per real dollar of GDP has fallen by approximately two-thirds since 1973, and the duration of supply disruptions has compressed substantially as shale production and strategic reserve coordination have reshaped global swing capacity. This page documents the underlying series, the episode-by-episode breakdown, and the methodology — including the sensitivity of the threshold rule to alternative classification choices — with the full dataset available for download. Key Findings at a Glance Period covered: January 1970 – March 2026 (FRED, EIA, NBER) Major oil shocks identified: 8 (7 completed, 1 ongoing) Completed shocks followed by NBER recession within 18 months: 4 of 7 Empirical recession threshold: ~4% of US GDP (peak oil burden) Completed shocks above threshold: 4 episodes — 4 recessions (1973, 1979, 1990, 2008) Completed shocks below threshold: 3 episodes — 0 recessions (2000, 2022) plus 1 partial false positive (2011 at 4.80%) Heaviest burden on record: 8.65% of GDP (April 1980, Iranian Revolution) 2026 Iran War (ongoing): peak-to-date burden ≈ 2.57% of GDP at the intraday WTI high of $117.63 (March 2026) Longest completed episode: ~40 months (2022 Ukraine War — burden stayed below threshold throughout) US petroleum intensity of real GDP: −66% since 1973 (from 13.6 to 4.6 thousand barrels per day per billion dollars of GDP, expressed in 1973 dollars) The 2011 Arab Spring episode peaked at 4.80% of GDP — technically above the threshold — but was not followed by an NBER-dated recession. It is the single partial false positive in the modern series. See Counter-Arguments and Limitations and Methodology — Sensitivity to Classification.

Every Major US Oil Shock Since 1970 — Burden, Duration, and Outcome

The table below lists every sustained oil price shock since January 1970, as identified by a 30% sustained deviation of monthly WTI above its trailing 36-month average. For each episode, we report the peak oil burden (annualized US petroleum spend as a share of nominal GDP at the time of the peak), the duration (days from onset to the price returning within 10% of the pre-shock 12-month average), and whether an NBER-dated recession began within 18 months of shock onset.

Episode Peak Date Peak WTI (nominal) Peak WTI (2024 real) Peak Burden (% GDP) Duration (days) Recession ≤ 18m ⁴ 1973 OPEC Embargo Oct 1974 $11.16 $68.64 4.34% 488 ✓ Yes 1979 Iranian Revolution Apr 1980 $39.50 $153.16 8.65% 1,065 ✓ Yes 1990 Gulf War Oct 1990 $35.92 $84.47 3.70% 184 ✓ Yes 2000 Y2K / OPEC cuts Nov 2000 $34.40 $61.95 2.33% 610 ✗ No 2008 Peak Jun 2008 $133.93 $193.20 6.47% 670 ✓ Yes 2011 Arab Spring Apr 2011 $110.04 $154.04 4.80% 578 ✗ No ¹ 2022 Ukraine War Jun 2022 $114.84 $122.14 3.31% 1,216 ✗ No 2026 Iran War Mar 2026 ² $117.63 ² $112.69 2.57% ~50 ³ — (ongoing)

¹ 2011 is the only post-1970 episode where the burden briefly crossed 4% without a subsequent NBER recession — a partial false positive. See Counter-Arguments and Limitations below.

² Intraday high reached March 2026 during the US-Iran military escalation. The monthly average WTI for March 2026 was $91.38 (FRED WTISPLC).

³ Duration is preliminary. The April 2026 ceasefire announcement is not assumed to be permanent; the duration figure reflects observations through mid-April 2026 only and will be revised upward if the price stays elevated.

⁴ The “recession ≤ 18m” flag uses shock onset as the start of the 18-month window, following the convention in Hamilton (2003). Under a peak-based clock, the 2000 episode would reclassify (the March 2001 NBER recession began approximately 4 months after the November 2000 price peak). See Methodology — Sensitivity to Classification.

Sources: Federal Reserve Bank of St. Louis (FRED series WTISPLC, CPIAUCSL, GDP); U.S. Energy Information Administration, Monthly Energy Review, Table 3.1 (series PATCPUS, petroleum products supplied); National Bureau of Economic Research, Business Cycle Dating Committee. Dataset compiled April 2026.

What the Data Show: Three Structural Findings

1. The 4%-of-GDP threshold is unusually robust

Across the seven completed shocks documented above, the peak oil burden sorts cleanly around 4% of US GDP. The four episodes that crossed that line (1973, 1979, 1990, 2008) were all followed by NBER-dated recessions within eighteen months. The two that stayed cleanly below it (2000 and 2022) have not produced recessions. The single partial exception is the 2011 Arab Spring episode, where the burden briefly touched 4.80% without triggering a downturn; this remains the only post-1970 observation that doesn’t fit the rule. The 2026 episode, with a peak burden of 2.57% as of April 2026, is currently positioned in the sub-threshold cluster, though the episode remains open.

The consistency is striking because the threshold is expressed as a share of GDP, not as a dollar price. A $100 barrel in 1980, 2008, and 2026 represented three very different shocks to the US economy. In 1980, that price would have absorbed roughly 6% of GDP; in 2008, about 3.8%; in 2026, just over 2%. What the 4%-of-GDP rule captures is the fraction of national income that must be redirected toward petroleum — and historically, once that fraction exceeds roughly one-twentieth of GDP, the real-economy pass-through becomes large enough to trigger a broader contraction. It is worth flagging that the 2008 peak was endogenous to the financial conditions unraveling in the second half of that year (Kilian, 2009): part of the price action reflected, rather than purely caused, the recessionary dynamic. The threshold is therefore best read as a sufficient-conditions marker, not a deterministic trigger.

2. US oil intensity has fallen by roughly two-thirds since 1973

The denominator of the burden ratio has changed as dramatically as the numerator. In 1973, US petroleum consumption stood at roughly 18.7 million barrels per day against a nominal GDP of $1.4 trillion — about 13.6 thousand barrels of daily consumption per billion dollars of GDP. By 2026, consumption is roughly 19 million barrels per day against a nominal GDP of $31.7 trillion. Once the 2026 GDP figure is deflated to 1973 dollars (using CPI-U), the petroleum intensity of US real GDP has fallen by approximately 66% — the US economy now produces roughly three real dollars of output per barrel consumed for every dollar it produced fifty-three years ago. This is the single most important structural reason the same nominal oil price is a smaller shock today.

The mechanisms behind this decline are well-documented: the shift from manufacturing to services, the tripling of vehicle fuel economy standards since the 1970s, the electrification of rail and industrial heat, the substitution of natural gas for fuel oil in power generation, and — more recently — the emergence of electric vehicles as a meaningful share of new sales. None of these trends reverse quickly. The 2026 economy is not the 1973 economy running the same oil-shock transmission mechanism at higher prices; it is a structurally different economy.

3. Shock duration has compressed substantially since the 1970s

The final row of the table is the most novel observation in the series. The 1979 shock lasted roughly 1,065 days from onset to the price returning near its pre-shock baseline; the 1990 Gulf War shock took 184 days; the 2022 Ukraine episode stretched to 1,216 days but kept burden sub-threshold throughout. The 2026 Iran War episode, on data through April 2026, has so far displayed an unusually compressed price trajectory — though, as noted in the table footnote, the duration figure is preliminary and contingent on the price holding from here. The broader trend over the past three decades is unambiguous: shock duration has compressed substantially relative to the 1970s. Three operational changes in the global oil market explain this shift. First, US shale production now functions as swing capacity on a timescale of months rather than the years required by conventional development. Second, coordinated Strategic Petroleum Reserve releases — deployed at scale in 2022 and again in 2026 — provide a direct supply buffer that did not exist at similar scale before 2011. Third, OPEC+ cohesion has weakened relative to the 1970s, reducing the duration of supplier-side supply restrictions.

A shock whose price-elevated duration is measured in months rather than years transmits less to the real economy even at the same peak price, because the capital-spending and consumption-adjustment channels work on multi-quarter horizons. A short-duration spike in headline CPI does not, by itself, reset inflation expectations or credit conditions the way a multi-year plateau would.

Why a Burden Threshold Exists: The Transmission Mechanism

The existence of a ~4% burden threshold is not a coincidence of the data. It corresponds to the point at which three transmission channels compound into a recessionary dynamic, as documented in the literature on oil and macroeconomic activity from James Hamilton’s work at UC San Diego through to Lutz Kilian’s structural VAR decompositions (notably Kilian and Vigfusson, 2011).

The first channel is real income compression. An oil price spike is effectively a tax paid by US consumers and businesses to petroleum producers, some of whom are foreign. When the tax rises from, say, 2.5% to 6% of GDP, the income loss to non-oil sectors becomes large enough to force material cuts in discretionary spending. At 2% of GDP, the same mechanism operates but the amplitude is small enough to be absorbed by buffer stocks of savings and corporate margins.

The second channel is monetary policy response. Oil shocks feed headline inflation directly and core inflation indirectly through transportation and petrochemical input costs. Central banks historically respond to the resulting inflation impulse with tighter policy, even when they recognize the shock’s supply-side origin. The degree of tightening scales with the magnitude and persistence of the shock. Below roughly 4% of GDP, the inflation pass-through is modest enough that a determined central bank can “look through” the impulse; above it, the political and mandate pressures typically force a tightening that compounds the real-income effect.

The third channel is uncertainty and capital allocation. Large, sustained oil shocks raise implied volatility across energy-sensitive sectors — transportation, chemicals, heavy industry, airlines — and induce capital-spending deferrals. The 2008 cycle and the 1979–1981 cycle are particularly clear examples of this. A 50-day episode, by contrast, is too short to trigger meaningful capex re-sequencing; firms treat it as a timing issue rather than a regime change.

When any one of these channels operates in isolation, the effect is manageable. It is their compounding — observable only above roughly 4% of GDP in the modern series — that produces recessions.

Why the 2026 Shock Is, So Far, Below the Historical Threshold

The 2026 Iran War episode combines three properties that, as of April 2026, place it below the historical recessionary-shock band. The peak price, at $117.63 intraday in late March 2026, is high in absolute terms but only the 79th percentile of real-terms WTI since 1986 — meaningfully below the $193 real-terms peak of 2008 and far below the $153 real-terms peak of 1980. The consumption denominator is approximately 19 million barrels per day, roughly unchanged from the 2008 era, but the GDP denominator has grown from $14.8 trillion in 2008 to $31.7 trillion today, halving the ratio mechanically. And the duration to date — from the February 2026 onset through the April 2026 partial de-escalation — has so far kept the cumulative burden well below historical recessionary episodes.

This is not a claim that the 2026 shock is economically costless. The temporary inflation impulse is real, consumer sentiment has registered the gasoline price move, and certain energy-intensive sectors have absorbed margin compression. Nor is it a forecast that the episode will remain sub-threshold: a renewed escalation that sustained WTI above approximately $110 for six months or more would push the cumulative burden into the historical recessionary band, at which point this analysis would require revision. The narrower claim is that the mechanical conditions under which past US oil shocks have produced US recessions are not, on data through April 2026, present in this one — and that the consensus invocation of the Hamilton rule conflates a nominal price level with a macro-relevant shock.

Counter-Arguments and Limitations

The case against the conclusion presented here is worth stating plainly. Three objections deserve serious consideration.

First, the burden metric measures cost, not transmission speed. A short, sharp shock could still damage financial conditions via credit spreads, equity volatility, and dollar dynamics even if the cumulative income loss is modest. The 2022 episode, despite staying sub-threshold, coincided with the sharpest bond drawdown on record; a similar coincidence of oil and credit stress in 2026 — even briefly — could produce outcomes not captured by the burden-threshold rule.

Second, the threshold is an empirical regularity, not a structural law. With only eight modern episodes, the 4%-of-GDP line is drawn from a small sample. The 2011 Arab Spring episode, which breached the threshold without triggering a recession, hints that post-2008 monetary policy regimes may have shifted the transmission mechanics. The rule could fail in either direction — a sub-threshold shock could produce a recession, or an above-threshold shock could be absorbed.

Third, the 2026 episode is not yet closed. The April 2026 ceasefire announcement has not, at the time of writing, been followed by a return of WTI to its pre-shock baseline. A renewed escalation that kept WTI above $110 for six months or more would plausibly push the cumulative burden toward 4% of annualized GDP, at which point the analysis on this page would require revision. The dataset and methodology are designed to be updated monthly as new observations arrive.

Fourth, the statistical confidence around the threshold is wide. A more formal classification approach — for example, a logistic regression jointly weighting peak burden and duration — would produce a smoother decision boundary than the single 4%-of-GDP line drawn here. With only seven completed episodes, however, such a model is too unstable to dominate the dominant-axis intuition: the implied boundary shifts substantially when any single observation is excluded. The threshold framework presented here trades statistical sophistication for transparency, and is best interpreted as a necessary-but-not-sufficient empirical regularity rather than a calibrated probability model.

A disciplined reading of the evidence, therefore, is that the 2026 shock as currently observed does not meet the historical conditions for a recessionary oil shock. It does not rule out one, and it does not imply that current macroeconomic conditions are benign for reasons unrelated to oil.

Common Misinterpretations

Citing the “ten of eleven recessions” rule without adjusting for magnitude. The Hamilton observation is correct but describes a selection of shocks that were mostly above the burden threshold by construction. Applying the rule to the 2026 episode treats the presence of a price spike as the relevant variable rather than its scale. The threshold analysis presented here is a refinement, not a contradiction, of Hamilton’s framework.

Equating nominal price levels across decades. Commentary that compares the 2026 peak of ~$117 directly to the 1980 peak of ~$40 or the 2008 peak of ~$134 confuses dollars-of-the-day with shock magnitude. The relevant comparison is the share of national income the economy must redirect toward petroleum at each price — and that comparison places 2026 closer to 2000 than to 1979.

Ignoring duration. A $120 barrel held for two years and a $120 barrel held for six weeks are not the same macroeconomic event. The 2022 Ukraine shock lasted 40+ months and did not produce a recession precisely because the burden-weighted duration never reached the historical compound threshold. A 50-day 2026 spike is, on this same reasoning, mechanically unlikely to do so.

Over-reading single-sector indicators. Energy equity performance, gasoline retail prices, and Brent-WTI spreads all responded sharply to the 2026 shock. These are valid signals of stress in the affected sectors but do not, individually or collectively, substitute for the aggregate burden measure when the question is whether the overall economy is at recessionary risk from oil.

Methodology and Sources

Primary metric: Oil burden as a share of GDP, defined as

Burden_t = (WTI_t × PetroleumConsumption_t × 365) / NominalGDP_t

where WTI is the monthly average nominal WTI spot price (USD/barrel), PetroleumConsumption is US petroleum products supplied (thousand barrels per day, converted to annual barrels), and NominalGDP is the seasonally-adjusted annualized rate for the corresponding quarter. The burden is expressed in percent. Price series: WTI Spot Price, monthly average, FRED series WTISPLC. Available from January 1946. Consumption series: US Petroleum Products Supplied, monthly, thousand barrels per day, EIA Monthly Energy Review, Table 3.1, series code PATCPUS. Available from January 1949. GDP series: US Nominal GDP (SAAR), quarterly, FRED series GDP. Forward-filled to monthly within each quarter. For the 2026 Q1 observation, an extrapolation of +1% nominal growth from 2025 Q4 is used pending the official BEA release. Inflation adjustment: CPI-U (all urban consumers, seasonally adjusted), FRED series CPIAUCSL. Used for the “2024 real” conversion of peak WTI prices, rebased to the 2024 annual average. Recession dates: NBER Business Cycle Dating Committee. Recession is defined at the peak-to-trough horizon; the “recession within 18 months” flag is true if any part of an NBER recession falls within 18 months of shock onset. Shock episode definition: A candidate episode begins when monthly WTI rises 30% or more above its trailing 36-month average and sustains this level for at least two consecutive months. Adjacent candidate episodes separated by less than six months are merged. The final episode list has been cross-checked against the canonical oil-shock taxonomy in the academic literature (Hamilton, 2003; Kilian and Vigfusson, 2011). Duration definition: Days from episode onset to the first month where WTI returns within 10% of the pre-shock 12-month average, capped at 36 months. For 2026, duration is preliminary and will be updated as price data accrues. Limitations: (1) WTI is used as a price proxy; US refiner acquisition costs differ slightly. (2) The burden measure captures direct petroleum expenditure but not second-round effects via plastics, chemicals, and other petroleum derivatives. (3) The threshold is estimated from seven completed observations; statistical uncertainty around the ~4% line is substantial. (4) The framework applies to the US economy specifically; oil-importing economies with higher petroleum intensity (e.g., India, Japan) may exhibit different thresholds. Sensitivity to classification. The “recession within 18 months” flag is computed from shock onset, following the convention used in Hamilton (2003) and most subsequent oil-shock literature. An onset-based clock reflects the period during which transmission channels are compounding into the real economy, and is the academically standard convention. Under a stricter peak-based clock, however, one episode would reclassify: the 2000 Y2K/OPEC episode peaked in November 2000, and the NBER-dated 2001 recession began in March 2001 — approximately four months after the price peak, well within an 18-month peak-based window. Under that alternative specification, the 2000 episode shifts from “no recession” to “recession”, reducing the count of clean below-threshold non-recessions from two (2000, 2022) to one (2022 only). The economic literature attributes the 2001 recession primarily to the dot-com bust rather than to the 2000 oil price move (Hamilton 2003 explicitly treats 2001 as non-oil-driven), which is the substantive justification for the onset-based convention adopted here. The threshold rule itself, however, holds under either specification as a necessary but not sufficient condition: every above-threshold completed shock was followed by a recession; the relationship between sub-threshold shocks and recession outcomes depends on the timing rule, and readers should weight the 2000 case according to their preferred convention. Academic references: Hamilton, J. (2003). “What Is an Oil Shock?” Journal of Econometrics, Vol. 113, No. 2.

Kilian, L. (2009). “Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market.” American Economic Review, Vol. 99, No. 3.

Kilian, L. and Vigfusson, R. (2011). “Are the Responses of the U.S. Economy Asymmetric in Energy Price Increases and Decreases?” Quantitative Economics, Vol. 2, No. 3.

Blinder, A. and Rudd, J. (2008). “The Supply-Shock Explanation of the Great Stagflation Revisited.” NBER Working Paper No. 14563.

Bernanke, B., Gertler, M., and Watson, M. (1997). “Systematic Monetary Policy and the Effects of Oil Price Shocks.” Brookings Papers on Economic Activity, Vol. 1997, No. 1.

Frequently Asked Questions

What is the oil burden, and why use it instead of the oil price?

The oil burden is the share of national income a country spends on petroleum at prevailing prices. It is the product of the price, the physical quantity consumed, and the inverse of GDP. Using this ratio rather than the nominal price controls for the two things that have changed most in the US economy over the past fifty years: the size of GDP has grown roughly 23-fold in nominal terms since 1970, and the petroleum intensity of US real GDP has fallen by approximately two-thirds since 1973. A $117 barrel in 2026 is, measured as a share of national income, a fundamentally smaller shock than the same nominal price would have been in 1980.

Does the 4%-of-GDP threshold always predict a recession?

Over the modern data (1970–2026), every completed episode that crossed 4% was followed by an NBER recession within 18 months from shock onset, with one partial exception: the 2011 Arab Spring spike reached 4.80% without an ensuing NBER recession. The threshold is best understood as an empirical regularity with a credible transmission-mechanism explanation rather than as a deterministic rule. With only seven completed episodes of identification, the confidence interval around the 4% line is wide. The classification of the 2000 episode is also sensitive to the choice of timing convention — see Methodology — Sensitivity to Classification.

Why hasn’t the 2022 Ukraine War shock caused a US recession?

The 2022 episode was the longest in the series — approximately 40 months from onset to return near baseline — but the peak burden reached only 3.31% of GDP. Two structural factors compressed it: US petroleum consumption had declined slightly from pre-pandemic levels, and nominal GDP had grown rapidly during the post-Covid fiscal expansion. The shock was persistent but shallow on the burden measure, and US recession has not followed.

Could the 2026 shock still produce a recession later?

Yes. The thesis presented here is conditional on the shock profile observed through April 2026. A renewed escalation that sustained WTI above approximately $110 for six months or more would push the cumulative burden toward the historical threshold, at which point the analysis on this page would require revision. A shorter-duration but financial-market-stress-amplified shock could also produce a recession through a credit-conditions channel that the burden metric does not directly capture (see Counter-Arguments and Limitations, first objection). The page will be updated monthly as new data arrives.

How does this relate to the Hamilton “ten of eleven recessions” rule?

Hamilton’s well-known observation identifies major oil shocks preceding most post-WWII US recessions. It does not specify a magnitude condition — it treats the presence of a shock as binary. The burden framework presented here is a refinement: it distinguishes major-enough shocks (those that cross the 4%-of-GDP threshold) from notable but sub-threshold episodes. Under this refinement, the Hamilton observation remains intact for the above-threshold subset and the below-threshold episodes (2000, 2011, 2022, 2026) sit naturally outside it.

Isn’t it too early to draw any conclusion — the 2026 shock has barely started?

The strongest objection to the analysis presented here is that the 2026 episode is incomplete. As of April 2026 the price has retraced from its March intraday peak but has not returned to its pre-shock baseline, and the geopolitical situation remains unresolved. The conclusion drawn on this page is therefore narrower than “no recession will follow”: it is that, on data observed through April 2026, the shock profile does not match the historical recessionary template. If the price re-accelerates and stays elevated, the burden metric will rise, the duration figure will extend, and the classification will revisit. The framework is built to be updated, not to lock in a forecast.

What would change the threshold over time?

Anything that altered the transmission mechanisms discussed above. A meaningful reversal of US petroleum intensity (for instance, a prolonged pause in electrification), a persistent weakening of monetary policy’s willingness to accommodate supply shocks, or a regime change in household and corporate balance sheets that reduced absorption capacity, could all shift the threshold. The data presented here describe the 1970–2026 structure; they do not predict it will hold indefinitely.

Download the Complete Dataset Two CSVs: the full monthly time series (1970–2026, 675 observations) and the episode summary (8 shocks). Timeseries CSV (monthly) Episodes CSV (summary) Source: eco3min.fr — FRED / EIA / NBER data. Free to use with attribution.

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Conclusion

The 2026 oil price spike is a real event with real costs. It has compressed margins in energy-intensive sectors, contributed to a temporary inflation impulse, and surfaced the fragility of global supply chains dependent on the Strait of Hormuz. What it has not done, on the evidence assembled here through April 2026, is meet the historical conditions under which US oil shocks have translated into US recessions.

The 4%-of-GDP burden threshold has held across every completed major shock in the modern record — four recessions at or above it, none below it with the partial exception of 2011. The 2026 peak-to-date sits at roughly 2.6% of GDP, close to the 2000 OPEC-cuts episode and below the 2022 Ukraine War. The combination of a roughly two-thirds decline in US oil intensity (in real terms) since 1973, the shift of shale production into an operational swing-capacity role, and the duration profile observed so far places this shock structurally outside the recessionary-oil-shock reference class — pending confirmation that the price does not re-accelerate from here.

This does not mean US recession risk is zero, nor that oil has ceased to matter for macroeconomic dynamics. It means that applying a 1970s mental model to a 2020s economy produces forecasts calibrated to a transmission mechanism that has materially weakened, and that the consensus invocation of the Hamilton rule conflates a nominal price level with a macro-relevant shock. The threshold framework, and the underlying burden metric, are offered here as the most defensible operational way to distinguish the shocks that have historically mattered from those that have not — with the explicit caveat that the 2026 observation is preliminary and the page will be revised monthly as new data arrives.

The data and analysis presented on this page are provided for informational and educational purposes only. They do not constitute investment advice or a recommendation to take any specific action.

Last updated — 28 April 2026