The San Francisco Fed introduces new tools to monitor the risk of a U.S. economic recession.

According to news from Hash World, researchers at the San Francisco Federal Reserve have developed a new recession warning indicator that provides economists with more tools to assess whether the U.S. may fall into a recession. This tool is called the Labor Market Stress Indicator (LMSI), which reveals regional differences in the labor market by counting the number of states where the unemployment rate has risen at least 0.5 percentage points from its lowest level in the past 12 months. The research report states: "Whenever 30 or more states experience an accelerating rise in unemployment simultaneously, the national economy almost always falls into recession. The LMSI method is transparent—it only counts states with accelerating unemployment rates—making it easy to interpret, while also providing valuable insights into the regional distribution of economic pressure."

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