Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
Upside of Inequality Oxford Unintended Consequences

AI Summary. The 12-month US recession probability has been cut to the long-term average of 15%, after the unemployment rate fell to 4.051%, marginally below the level that activates the "Sahm rule" recession signal. Strong payroll growth and upward revisions imply an underlying jobs trend of 196k, above the estimated breakeven rate of 150-180k.

Jan Hatzius Goldman Sachs
Date Posted:

Citing the unemployment rate falling to 4.05%, Jan Hatzius has moved the @GoldmanSachs 12-month recession probability back to 15%, the firm’s long-term average.

Do falling unemployment and strong job gains lower recession odds?

Core argument: The 12-month US recession probability has been cut to the unconditional long-term average of 15%, where it stood before the unemployment rate's rise from 4.054% in June to 4.253% in July.

We have cut our 12-month US recession probability back to the unconditional long-term average of 15%, where it stood before the jump in the unemployment rate from 4.054% in June to 4.253% in July. The most important reason is that the unemployment rate fell to 4.051% in September, marginally below both the June level and the threshold that activates the “Sahm rule.” Moreover, with nonfarm payroll growth of 254k surprising sharply to the upside, prior months revised higher, and household employment also solid, we now estimate an underlying jobs trend of 196k, well above our pre-payrolls estimate of 140k and modestly above our estimated “breakeven rate” of 150-180k. The upshot is that the fundamental upward pressure on the unemployment rate may have ended via a combination of stronger labor demand growth and weaker labor supply growth (because of slowing immigration).

Takeaways by Macro Roundup® AI

  1. The 12-month US recession probability has been cut to the unconditional long-term average of 15%, where it stood before the unemployment rate's rise from 4.054% in June to 4.253% in July.
  2. The US unemployment rate fell to 4.051% in September, marginally below both its June level and the threshold that activates the "Sahm rule," the most important reason cited for the lower recession odds.
  3. Nonfarm payroll growth of 254k surprised sharply to the upside with prior months revised higher, lifting the estimated underlying jobs trend to 196k from a pre-payrolls estimate of 140k and modestly above the estimated breakeven rate of 150-180k.

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