-
New Entrants Drive US Unemployment Uptick; Sahm Rule Trigger a False Positive
The July uptick in the U.S. unemployment rate was driven largely by new entrants and re-entrants into the labor force, according to a new Fitch Ratings report. They accounted for about 40% of the increase since April 2023. “Despite traditionally being a reliable signal of prior recessions, the July triggering of the Sahm rule was somewhat unusual because it was driven by increased labor supply. This likely means it was a false positive,” said Olu Sonola, U.S. head of economic research. “While hiring rates have slowed meaningfully, layoff rates remain close to 20-year lows.” Permanent job losses are still ... (full story)