The purpose of comparing 2023 highest Salm rule number with the current one is to try to gauge the likewood of very mild recession in 2024.
In 2023, the highest Sahm Rule number recorded was 0.33%, which occurred in October. The Sahm Rule Recession Indicator, which is designed to signal the start of a recession when the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more relative to its low during the previous 12 months, had several notable readings throughout the year, but none reached the threshold typically associated with a recession signal.
As of the latest update in July 2024, the Sahm Rule Recession Indicator stands at 0.53%, up from 0.43% in June 2024 and significantly higher than 0.10% in July 2023. This suggests an increasing likelihood of recessionary pressures but does not definitively signal a recession, since other indicators like GDP growth, consumer spending, and industrial production, must also be considered.
As such, next few months could be the trade's market.
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