Bloomberg Economics has released a model that predicts a 27% chance of recession in the U.S. within the next 12 months.

Though the economy shows signs of cooling, it is unclear whether it will slow down into a recession. The economists who created the model noted that corporate profitability declines could slow hiring or even lead to layoffs. But inflation-adjusted wage gains in recent years bode better for the economy than the declines in wage growth before the 2007-2009 recession.

The authors write that while a recession is difficult to predict, the early warning signs bear watching. Read more.