According to ChainCatcher, researchers at the San Francisco Fed have launched a new recession warning indicator called the Labor Market Stress Index (LMSI), providing more tools for assessing economic recessions in the United States.
This indicator reveals regional differences in the labor market by counting the number of states where the unemployment rate has risen by at least 0.5 percentage points from the lowest level in the past 12 months. Research indicates that when 30 or more states see a rapid rise in unemployment rates, the national economy almost always falls into recession. The LMSI method is transparent and easy to interpret, providing valuable insights into the geographical distribution of economic stress.
