Sneaking Unemployment Rate Sparks Recession Fears
However, the U.S. economy is inching closer to a key recession indicator, says Moody’s.
The unemployment rate for November edged up to 4.6%, continuing the creep higher that analysts have been nervously monitoring throughout the year.
Moody’s Warns of Recession
While 4.6% is not a dire figure, it’s markedly higher than last November, when it was 4.2%.
The Sahm Rule, invented by former Fed economist Claudia Sahm, is a recession signal that is activated when the three-month moving average of the national unemployment rate rises by 0.5 percentage points or more.
Experts Predict Recession
Moody’s chief economist Mark Zandi and senior director of economic research Dante DeAntonio observed that America is close to triggering the Sahm Rule.
Cris deRitis, deputy chief economist at Moody’s Analytics, said he’d place a 40% likelihood on a recession occurring next year.
Impact of AI on Job Market
DeAntonio and Zandi agreed with their colleague, with the latter saying that one reason why job growth is weaker is less labor supply, because of the immigration policy.
AI is a reason for the weak demand from employers, Zandi said, and what happens when the productivity gains from AI really become clear?
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