{"id":210367,"date":"2025-12-30T08:51:08","date_gmt":"2025-12-30T08:51:08","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/?p=210367"},"modified":"2025-12-30T17:56:57","modified_gmt":"2025-12-30T17:56:57","slug":"hedging-recession-risk-job-losses-dec-29-2025","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/prediction-market\/hedging-recession-risk-job-losses-dec-29-2025\/","title":{"rendered":"Hedging Recession Risk, Job Losses: Dec. 29, 2025"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">As of Monday, Dec. 29, our ForecastTrader participants priced out a <a href=\"https:\/\/forecasttrader.interactivebrokers.ie\/eventtrader\/#\/market-details?id=726203920%7C20270325%7C0%7CQ4%202026&amp;detail=contract_details\">41%<\/a> chance that the US economy will enter a technical recession by the end of 2026, defined as two consecutive quarters of declining real gross domestic product on an annualized, seasonally adjusted, quarter-over-quarter basis. But another way to hedge an economic downturn would be to purchase \u201cYes\u201d contracts on December 2026 US unemployment at the <a href=\"https:\/\/forecasttrader.interactivebrokers.ie\/eventtrader\/#\/market-details?id=573031117%7C20270108%7C4.7%7CDecember%202026&amp;detail=contract_details\">4.7%<\/a> and <a href=\"https:\/\/forecasttrader.interactivebrokers.ie\/eventtrader\/#\/market-details?id=573031117%7C20270108%7C5.2%7CDecember%202026&amp;detail=contract_details\">5.2%<\/a> levels, which cost just $0.09 and $0.02, respectively, and are significantly undervalued in my opinion. The reason that recession and unemployment contracts go hand in hand is because when looking back at history, joblessness has always increased when recession hits (see chart below). Furthermore, unemployment is one of the criteria used by the National Bureau of Economic Research for calling a recession. Other factors include the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Real personal income less transfers<\/li>\n\n\n\n<li>Nonfarm payroll employment<\/li>\n\n\n\n<li>Real personal consumption expenditures<\/li>\n\n\n\n<li>Manufacturing and trade sales adjusted for price changes<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In consideration of the current US unemployment rate of 4.6%, it\u2019s heavily likely to rise above 4.7% if recession hits next year. 5.2% is a different story, but that\u2019s also a hedge that is available for just $0.02.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"1050\" height=\"765\" data-src=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-76.png\" alt=\"Unemployment has always risen near recessions \" class=\"wp-image-210368 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-76.png 1050w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-76-700x510.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-76-300x219.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-76-768x560.png 768w\" data-sizes=\"(max-width: 1050px) 100vw, 1050px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1050px; aspect-ratio: 1050\/765;\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"82\" data-src=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-1100x82.png\" alt=\"Will the United States economy enter a recession by the end of Q4 2026?\" class=\"wp-image-210369 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-1100x82.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-700x52.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-300x22.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-768x57.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77-1536x114.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-77.png 1739w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/82;\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"81\" data-src=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-1100x81.png\" alt=\"Will the US Unemployment Rate exceed 4.7% in December 2026?\" class=\"wp-image-210370 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-1100x81.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-700x52.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-300x22.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-768x57.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78-1536x113.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-78.png 1739w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/81;\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"81\" data-src=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-1100x81.png\" alt=\"Will the US Unemployment Rate exceed 5.2% in December 2026?\" class=\"wp-image-210371 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-1100x81.png 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-700x51.png 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-300x22.png 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-768x56.png 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79-1536x113.png 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/image-79.png 1741w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/81;\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Source for images: ForecastEx<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Note: Prices are highest bids as of the morning of Dec. 29, 2025.<\/em>&nbsp;<em>Contract time to expiration is also as of Dec. 29, 2025<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>To learn more about ForecastEx, view our Traders\u2019 Academy video <\/em><a href=\"https:\/\/forecasttrader.interactivebrokers.ie\/en\/learn.php\">here<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Past performance is not indicative of future results. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Forecast Contracts are only available to eligible clients of Interactive Brokers LLC, Interactive Brokers Canada Inc., Interactive Brokers Hong Kong Limited, Interactive Brokers Ireland Limited and Interactive Brokers Singapore Pte. Ltd.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Futures, event contracts and forecast contracts are not suitable for all investors. Before trading these products, please read the&nbsp;<a href=\"https:\/\/forecasttrader.interactivebrokers.ie\/Universal\/servlet\/Registration_v2.formSampleView?formdb=4744\" target=\"_blank\" rel=\"noreferrer noopener\">Forecast Contract Risk Disclosure<\/a>. Displayed outcomes and prices are based on real-time market sentiment from ForecastEx LLC, an affiliate of Interactive Brokers Group. Interactive Brokers Ireland Limited does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As of Monday, Dec. 29, our ForecastTrader participants priced out a 41% chance that the US economy will enter a technical recession by the end of 2026, defined as two consecutive quarters of declining real gross domestic product on an annualized, seasonally adjusted, quarter-over-quarter basis. But another way to hedge an economic downturn would be to purchase \u201cYes\u201d contracts on December 2026 US unemployment at the 4.7% and 5.2% levels, which cost just $0.09 and $0.02, respectively, and are significantly undervalued in my opinion. <\/p>\n","protected":false},"author":903,"featured_media":210372,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[3164,146,147,148,7],"tags":[314,814,1023,974],"contributors-categories":[370],"class_list":["post-210367","post","type-post","status-publish","format-standard","has-post-thumbnail","category-prediction-market","category-macro","category-north-america","category-text-articles","category-traders-insight","tag-market-outlook","tag-recession","tag-recession-forecasting","tag-unemployment","contributors-categories-ibkr-macroeconomics"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v28.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Hedging Recession Risk, Job Losses: Dec. 29, 2025<\/title>\n<meta name=\"description\" content=\"As of Monday, Dec. 29, our ForecastTrader participants priced out a 41% chance that the US economy will enter a technical recession by the end of 2026,...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-json\/wp\/v2\/posts\/210367\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hedging Recession Risk, Job Losses: Dec. 29, 2025\" \/>\n<meta property=\"og:description\" content=\"As of Monday, Dec. 29, our ForecastTrader participants priced out a 41% chance that the US economy will enter a technical recession by the end of 2026, defined as two consecutive quarters of declining real gross domestic product on an annualized, seasonally adjusted, quarter-over-quarter basis. But another way to hedge an economic downturn would be to purchase \u201cYes\u201d contracts on December 2026 US unemployment at the 4.7% and 5.2% levels, which cost just $0.09 and $0.02, respectively, and are significantly undervalued in my opinion.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/hedging-recession-risk-job-losses-dec-29-2025\/\" \/>\n<meta property=\"og:site_name\" content=\"IBKR Campus EU\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-30T08:51:08+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-30T17:56:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.interactivebrokers.eu\/campus\/wp-content\/uploads\/sites\/3\/2025\/12\/unemployment-claim-featured-img-700x394-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"700\" \/>\n\t<meta property=\"og:image:height\" content=\"394\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jose Torres\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jose Torres\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\n\t    \"@context\": \"https:\\\/\\\/schema.org\",\n\t    \"@graph\": [\n\t        {\n\t            \"@type\": \"Article\",\n\t            \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/#article\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/\"\n\t            },\n\t            \"author\": {\n\t                \"name\": \"Jose Torres\",\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/#\\\/schema\\\/person\\\/92c2be3b6162d92fb996417221509b6e\"\n\t            },\n\t            \"headline\": \"Hedging Recession Risk, Job Losses: Dec. 29, 2025\",\n\t            \"datePublished\": \"2025-12-30T08:51:08+00:00\",\n\t            \"dateModified\": \"2025-12-30T17:56:57+00:00\",\n\t            \"mainEntityOfPage\": {\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/\"\n\t            },\n\t            \"wordCount\": 330,\n\t            \"commentCount\": 0,\n\t            \"image\": {\n\t                \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/#primaryimage\"\n\t            },\n\t            \"thumbnailUrl\": \"https:\\\/\\\/www.interactivebrokers.eu\\\/campus\\\/wp-content\\\/uploads\\\/sites\\\/3\\\/2025\\\/12\\\/unemployment-claim-featured-img-700x394-1.jpg\",\n\t            \"keywords\": [\n\t                \"market outlook\",\n\t                \"recession\",\n\t                \"Recession forecasting\",\n\t                \"unemployment\"\n\t            ],\n\t            \"articleSection\": [\n\t                \"IBKR Prediction Markets\",\n\t                \"Macro\",\n\t                \"North America\",\n\t                \"Text Articles\",\n\t                \"Traders' Insight\"\n\t            ],\n\t            \"inLanguage\": \"en-US\",\n\t            \"potentialAction\": [\n\t                {\n\t                    \"@type\": \"CommentAction\",\n\t                    \"name\": \"Comment\",\n\t                    \"target\": [\n\t                        \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/#respond\"\n\t                    ]\n\t                }\n\t            ]\n\t        },\n\t        {\n\t            \"@type\": \"WebPage\",\n\t            \"@id\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/\",\n\t            \"url\": \"https:\\\/\\\/ibkrcampus.eu\\\/campus\\\/traders-insight\\\/hedging-recession-risk-job-losses-dec-29-2025\\\/\",\n\t            \"name\": \"Hedging Recession Risk, Job Losses: Dec. 29, 2025 - 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In this capacity, he is responsible for economic analysis, economic commentary and educational content focused on the economy. Prior to joining Interactive Brokers, Jos\u00e9 spent 6 years working as an economist in the United States government within the Federal Deposit Insurance Corporation (FDIC) and the Bureau of Labor Statistics (BLS). During his time with the U.S. government, Jos\u00e9 frequently led presentations covering economic conditions and forecasts for elected officials, political appointees and senior management. He also built economic models, consulted with private sector executives, contributed to the modernization of economic processes and gained recognition for predicting the inflationary episode of the 2020s. Jos\u00e9 has also been a professor of economics at the City University of New York and holds a master\u2019s degree in financial economics from West Texas A&amp;M University. 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