San Francisco Fed Develops New Recession Indicator

The San Francisco Federal Reserve has introduced a new recession warning tool designed to assist economists in predicting U.S. economic downturns. The Labor Market Stress Indicator (LMSI) analyzes regional labor market trends by tracking the number of states where unemployment rates have climbed at least 0.5 percentage points from their recent historical lows over the past year. The research indicates that when 30 or more states experience a simultaneous surge in unemployment, it signals an imminent recession for the nation as a whole.