Nobel laureate Paul Krugman: November non-farm payroll data indicates the US economy is in the early stages of recession.

According to an analysis by Nobel laureate and former New York Times columnist Paul Krugman, the US non-farm payrolls report released on December 16 indicates that while it is too early to declare a recession, the data at least suggests that the economy is in the early stages of one.

It stated that the overall unemployment rate in November was 4.6%, higher than the 4% average for 2024, a figure that is close to triggering the "Sahm Rule".

Although the Labor Department was unable to collect key data for October due to the government shutdown, interpolating the September unemployment rate of 4.4% and the November unemployment rate of 4.6% allows for an estimate of approximately 4.5% for October. These three months' unemployment figures closely match the predicted rise in unemployment as indicated by Sam's Law, which foreshadows an impending recession.

Note from odaily: The Sam Rule, proposed by former Federal Reserve economist Claudia Sam, is an immediate recession indicator based on the unemployment rate. The indicator is triggered when the U.S. three-month moving average unemployment rate rises by 0.5 percentage points or more from the lowest three-month average of the previous 12 months, and is generally considered a signal that the economy has entered the early stages of a recession.