Oddbean

The inventor of a famed recession indicator says many state-level warning signs are less dire when you factor in immigration ========== Claudia Sahm, the inventor of the Sahm Rule recession indicator, says that many state-level warning signs are less dire when you factor in immigration. The Sahm Rule has triggered in 20 states, indicating a recession, but Sahm argues that the increase in unemployment rates is partly due to the strength of the economy in recent years, which has attracted much-needed immigration to meet the demands of a hot labor market. Last year, net immigration into the US hit 3.3 million, a sharp rise from the average of 900,000 between 2010 and 2019. Sahm explains that immigrants boost the population but don't immediately take up jobs due to the immigration process, leading to a temporary rise in the unemployment rate. The burst of immigrant labor during the post-pandemic reopening in 2021 was critical in easing the national labor shortage and ensuring the economy could run at its pace. JPMorgan has also noted the positive impact of immigrants on the labor market and predicts that this population should keep US output up. #RecessionIndicator #SahmRule #UnemploymentRate #LaborMarket #Immigration #Economy https://www.businessinsider.com/immigration-sahm-rule-recession-indicator-unemployment-rate-labor-market-economy-2024-3