this post was submitted on 02 Aug 2024
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https://www.marketwatch.com/livecoverage/stock-market-today-dow-futures-flat-after-1000-point-rally-in-four-days/card/a-reliable-labor-market-recession-indicator-has-triggered-but-this-time-it-could-be-bullish-for-stocks-sXgJRUlCo2TNywR6XgDc

The Sahm rule is a robust tool that has been very accurate in identifying a downturn in the business cycle and almost always doesn't trigger outside of a recession. The simplicity of the calculation contributes to its reliability. The Sahm rule signals the early stages (onset) of a recession and generated only two false positive recession alerts since the year 1959 (there have been 11 recessions since 1950); in both instances — in 1959 and 1969 — it was just a little untimely, with the recession warning appearing a few months before a slide in the U.S. economy began.[13] In the case of the false positive warning related to the year 1959 it was followed by an actual recession six months later. The Sahm rule typically signals a recession before GDP data makes it clear.

https://en.m.wikipedia.org/wiki/Sahm_rule

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[–] KnilAdlez@hexbear.net 27 points 3 months ago (1 children)

Huh, interesting tool. Although I have to say

The simplicity of the calculation contributes to its reliability

economist moment

[–] yogthos@lemmy.ml 9 points 3 months ago
[–] crime@hexbear.net 21 points 3 months ago* (last edited 3 months ago)

The Sahm rule originates from a chapter in the Brookings Institution's report on the use of fiscal policy to stabilize the economy during recessions. The chapter, written by Sahm, proposes fiscal policy to automatically send stabilizing payments to citizens to boost economic well-being.

And then they didn't. (Joe Biden still owes me $2000.)

She seems cool though, for an economist at least:

"I created the Sahm rule to send out stimulus checks automatically. The idea was to act fast to make the recession less severe and help families. The star was always the stimulus check, not the indicator that other people named after me."

[–] iminsomuchpainv2@hexbear.net 14 points 3 months ago* (last edited 3 months ago) (1 children)

lathe-of-heaven

Recession begins. "Folks what have we been saying, the black jobs, the inflation, can you believe it, our country's going to hell" a-little-trolling

Harris: "Bidenomics works" contextphobic

Vance dropped, replaced with ~~Hulk Hogan~~ Vince McMahon (credit @LocalOaf@hexbear.net )

Conflagration in the middle east. finkelstein-lambaste free-palestine

Trump landslide? k-pain

[–] LocalOaf@hexbear.net 6 points 3 months ago (1 children)

VP Vince McMahon feels a lot more distantly possible than Hogan, Hogan's down in the Mike Pillow level of improbability imo

[–] iminsomuchpainv2@hexbear.net 3 points 3 months ago

That's a good suggestion, fixed

[–] Lurker123@hexbear.net 8 points 3 months ago (1 children)

Wow OP, you’re telling me that a rule that, per your Wikipedia article, originated in a 2019 paper, has had a “near” perfect record since 1970? That’s crazy!

The crazy part is, of course, that the record isn’t actually perfect.

[–] Sulvor@hexbear.net 24 points 3 months ago (1 children)

You can apply theories retroactively if you have the historical data

[–] someone@hexbear.net 9 points 3 months ago

I would argue that anyone who tries to dispute this excellent point needs a refresher on everything Marx ever did.