Unemployment Rates Signal Potential Recession in the US: 20 States at Risk and What it Means for Policymakers and Businesses

Do Not Use the Sahm Rule Recession Indicator on States

Despite the brief respite at the beginning of 2024, concerns about a recession are once again on the rise in the United States. This time, economists are focusing on rising unemployment rates in several states as a potential sign that a recession may be imminent or already here. One of the primary reasons for these warnings is the Sahm rule, an indicator developed by an economist that suggests 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, accounting for more than 40% of the US labor force. These include California, which represents 11% alone. The implications of these warnings are significant and could have ripple effects on the broader economy if even just a few states experience a downturn. It is crucial for policymakers and businesses to closely monitor these indicators and take appropriate actions to mitigate any potential impact. Only time will tell whether these warnings are accurate, but being prepared for any economic challenges is essential.

Sophia Reynolds

As a content writer at newsloki.com, I'm always on the lookout for the next intriguing story to share with our audience. With a passion for crafting engaging and informative content, I delve into a variety of topics ranging from breaking news to feature pieces. My goal is to captivate readers through my words and keep them coming back for more. When I'm not typing away at my keyboard, you can find me exploring new coffee shops, diving into a good book, or taking long walks in nature. Join me on this journey of storytelling and discovery at newsloki.com - where every word has the power to inform and inspire.

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