New Indicator Suggests 40 Percent Chance US Is in Recession

A new recession indicator has been born, and it suggests a 40 percent chance the U.S. economy could be in a downturn. Pascal Michaillat and Emmanuel Saez, economists at the University of California, recently published a paper outlining the details of the new recession signal, which adds another layer to the concept known as the Sahm rule. Earlier this month, the financial markets suffered a three-day selloff, partially due to the July jobs report activating the widely cited concept. Named after former Federal Reserve economist Claudia Sahm, the idea states that the United States is in a recession if the difference between the three-month moving average of unemployment and the previous 12-month low is 0.5 percent or higher....