Key Points:
The September unemployment rate fell to 4.05% from 4.22% – the largest month over-month decrease since March 2022.
- Using unrounded unemployment rates, the drop was large enough to cause the widely-watched Sahm rule recession indicator to untrigger.
- As a reminder, the Sahm rule indicates a recession when the 3-month moving average of the national (U3) unemployment rate rises by 50 basis points or more above the minimum value for that average over the prior year.
Sahm Rule
According to the Job Openings and Labor Turnover Survey (JOLTS), the number of job openings per unemployed worker rebounded slightly in August.
- Currently, there are 1.1 openings per unemployed worker – slightly less than the 2019 average of 1.2.
- While the layoff/discharge rate remains low (1.0% vs a 1.2% 2019 average), the rate of hiring is depressed (3.3% vs a 3.9% 2019 average) meaning an increase in layoffs could translate to rising unemployment relatively quickly.
Job Opening and Unemployment
.png)
