The Mel Rule, which is based on state-level data, has been triggered, indicating a potential recession. This rule is similar to the Sahm Rule, but it focuses on state-specific unemployment rates. When state-level unemployment rates rise by 0.5 percentage point or more over a three-month period, it signals a likely recession. The idea behind this approach is to capture localized economic trends more accurately. While the national unemployment rate provides a broader perspective, state-level data can reveal nuances and variations within individual states.
State-level unemployment rates are calculating in a more holistic manner than the national unemployment rate.
BCA’s Mel Rule mirrors the Sahm rule except that it is based on state data.
The Mel Rule has now been triggered, suggesting that a recession is likely. pic.twitter.com/MOEKtkRdyS
— Peter Berezin (@PeterBerezinBCA) June 25, 2024
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