Job Market Issue / Trend - Unemployment
Analysis by Goldman Sachs finds that lay-off announcements tend to run about two months ahead of actual jobless claims. The bank now puts the odds of a half-a-percentage-point rise in the unemployment rate over the next six months at as high as 25%, up from 10% in the spring. Thankfully, though, the economy has some buffers. Probably the most popular gauge for when to panic is the Sahm Rule, named after Claudia Sahm, a former Fed economist. The measure looks for a short, sharp rise in unemployment, which tends to happen when a recession is on the way, by comparing the current unemployment rate with its trough over the past year. In August 2024 it hit the danger zone, but only briefly. This year, unemployment has risen more slowly and the recession threshold is nowhere close to being reached.
Abridged - The Economist
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