by MATT MARGOLIS
The White House hyped the latest jobs report, which came out Friday, as good news, but in reality, things aren’t as great as the spin suggests. In fact, according to a report from Benzinga, a financial news and conference company in Detroit based on the new jobs report, the United States is “close to breaching the threshold for the Federal Reserve’s ‘Sahm Rule.'”
The Data: The Sahm Rule, named for economist Claudia Sahm, is a heuristic measure used by the Federal Reserve to determine whether the U.S. economy is in a recession. The rule has correctly predicted every recession since 1950 with only one false positive in 1959.
The Sahm Recession Indicator signals the start of a recession when the three-month moving average of the unemployment rate rises by 0.5% or more relative to the minimum of the three-month averages from the previous 12 months.
The Sahm indicator reached 0.43% in June, according to the Federal Reserve Bank of St. Louis. The data is sourced from Friday’s Bureau of Labor Statistics June jobs report. The number has steadily increased since last year. A post on X illustrated the increase in a graph.
Consensus 4% vs Actual 4.1% – Real Time Sahm Rule for June [updated] – still below threshold https://t.co/8OEmiTDMkI pic.twitter.com/ChLcbpdxOk
— Menzie Chinn (@menzie_chinn) July 5, 2024
The report notes that the Sahm Rule is used to guide monetary policy decisions, suggesting that leading recession indicators could prompt the Federal Reserve to lower interest rates. Currently, the market indicates a 75% probability of rate cuts in September, according to the CME group.
However, the Sahm rule is just one indicator and is by no means without flaws. Benzinga notes that “Sahm herself has said that the rule is ‘is an empirical reality, not a law of nature.’ The indicator’s approaching 0.5% is a warning sign, however, for the U.S. as it remains in murky economic waters.”
Meanwhile, the housing market remains in rough shaping thanks to high interest rates and declining sales.“Home sales activity is at a 30-year low — it’s essentially stuck at that level, so all of the economic activity associated with home sales is at a depressed level,” Lawrence Yun, chief economist at the National Association of Realtors, told Politico.
Yet another Robin Ware/Robert L. Peters/JRB Ware/Pedo Peter/idiot Biden mess for Trump to clean up. Many of the “new jobs” are government jobs, using taxpayer money and debt to make the labor stats look better.
Technically we skated just above official recession.
BUT wait.
DBS always adjusts these jobs numbers DOWN.
So, when the correction is published we will officially have been in a recession already.
Funny how the jobs numbers are always revised downward under Pervy but were almost always revised upward under PT. Incompetence or intentional?
I’ve got news for you. We’ve been in a depression since 2008, with a brief respite from 2017-19.
Is this part of that middle out bottom up Biden economics?
https://www.msn.com/en-us/money/careersandeducation/john-deere-announces-layoffs-as-company-moves-jobs-to-mexico/ss-BB1plH9K?ocid=a2hs#:~:text=John%20Deere%20Announces%20Layoffs%20As%20Company%20Moves%20Jobs%20to%20Mexico,-John%20Deere%2C%20the&text=The%20company%20plans%20to%20shift,cut%20costs%20and%20enhance%20efficiency.