238: Recession “Yellow Flags” Emerge as Unemployment Metric Rises w/The Washington Post's Heather Long

On The Market

BiggerPockets

News, Education, Business, Investing

4.8 • 858 Ratings

🗓️ 29 July 2024

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

One of the most reliable recession indicators, the “Sahm Rule,” just issued a “yellow flag” for the economy. Even now, with low unemployment, high spending, and overall economic growth, we aren’t protected from a recession or economic downturn. Will the US economy be able to dodge this recession, and will the Fed be fast enough to save us from falling into a state of high unemployment and meager economic growth? The Washington Post’s Heather Long joins us to share the latest data on the labor market, unemployment rate, Fed rate cuts, and why this particular recession indicator is going off now. First, we talk about why there is so much positivity in the job market and why most people won’t notice the cracks starting to form. With tech jobs getting slashed and government jobs growing, are we moving in the right direction? Heather also explains a strong recession indicator, the “Sahm Rule,” and why it’s throwing up a “yellow flag” warning even with the hot job market. Finally, we’ll touch on interest rates, whether the Fed will actually come through with a rate cut this year, and how fast future rate cuts could come after the first. In This Episode We Cover The unemployment-based recession indicator that’s throwing up “yellow flags” Which industries are hiring and which are firing in 2024 What the “unemployment rate” really means, and why most people get this wrong Immigration’s HUGE effect on unemployment and how it may be skewing the numbers The Fed’s tricky decision to make and whether rate cuts could help this situation And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Dave's BiggerPockets Profile On The Market 168 - How to Prepare for a Recession in 2024 Real-time Sahm Rule Recession Indicator Read More from Heather Grab the Book, “Recession-Proof Real Estate Investing” Jump to topic: (00:00) Intro (01:06) Good Time to Get a Job? (04:50) Unemployment Rate Explained (07:59) Who's Losing Their Job? (10:21) Recession "Yellow Flags" Emerge (16:56) Immigration's Huge Effect (21:05) Spending Still Going Strong? (24:16) The Fed's Rate Cut Plans Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-238 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	An unemployment-related recession indicator called the SAMROL just started flashing a yellow warning here in the U.S.
0:08.4	So what is this rule and how is it measured?
0:11.9	How likely is it that the Fed reacts to this yellow warning and how much should investors be paying attention?
0:18.6	Today, we're going to dig into the state of the labor market.
0:26.4	Hey, everyone, it's Dave and welcome to On the Market. Today, we're talking to Heather Long.
0:31.6	She's a calmness at the Washington Post, and she writes about the economy and labor market
0:36.3	specifically.
0:42.8	And in today's episode, we're going to ask Heather about how trends in the current labor market may be indicating a coming recession. We'll also talk about the downstream impacts
0:48.4	of unemployment upticks on the housing market in general, and if all this new data may
0:54.1	lead to a Fed decision to lower
0:56.1	interest rates sooner rather than later. All right, let's bring on Heather.
1:05.8	Heather, welcome to the show. Thank you for joining us.
1:08.7	It's great to be here. Thanks for having me.
1:10.8	We're here to talk about the labor market, which is really confusing. There's so many different
1:15.8	metrics, so many different trends to keep an eye on. So maybe you could just help us with some
1:21.2	context and give us an overall rundown of the most important data sets and trends that we're seeing today.
1:29.2	Sure.
1:30.0	Overall, it's a pretty darn good time still to find a job, to get a raise, and to hopefully
1:37.1	get on a career track.
1:39.4	If you look back at the past few years, it's been really crazy for job seekers and for workers. Obviously,
1:46.3	many people lost their jobs during the pandemic. Then we had the great resignation trend,
1:52.2	or what I like to call, great reassessment of work. A lot of people were able to switch careers
	...

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