• Fri. Jun 14th, 2024

Economists Sound the Alarm: Unemployment Rates Indicate Possible US Recession

BySamantha Jones

Mar 27, 2024
Do Not Use the Sahm Rule Recession Indicator on States

The United States has been on a “recession warning” for the past two years, and despite a brief respite entering 2024, the alarms are ringing once again. This time, the concerns are not focused on the usual indicators such as an inverted Treasury market yield curve or low consumer and business sentiment. Instead, economists are pointing to the rising unemployment rates in several states as a potential sign of an impending recession – or even one that may already be here.

One of the primary reasons for these warnings is a recession indicator known as the Sahm rule, developed by an economist. The premise of this rule is simple: if the three-month average of the unemployment rate is half a percentage point or more above its low in the prior 12 months, it indicates that the economy is in a recession. When applied to individual states, this rule suggests that 20 of them should be in a recession, as they collectively account for more than 40% of the US labor force, including California, which alone represents 11%.

The implications of these warnings are significant, as a recession in even just a few states could have a ripple effect on the broader economy. It is essential for policymakers and businesses to closely monitor these indicators and take appropriate actions to mitigate the potential impact of a downturn. Only time will tell whether these warnings are accurate, but it is crucial to be prepared for any economic challenges that may lie ahead.

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

Leave a Reply