Indicators · The labour market
US hiring
Normal Downturn signal
Hires were 3.4% of jobs in Sep 2026; the lowest rate of the previous two years was 3.1%. Continuing claims are 12% lower than a year earlier.
The hiring rate is lower than 77% of the readings since 2000.
US recessions Periods when this signal was on
What it measures
The US hiring rate (hires as a share of jobs) and continuing claims for unemployment insurance.
Why it matters
When firms stop hiring, people who lose a job stay out of work longer.
When it triggers
Triggers when the hiring rate is at its lowest in two years while continuing claims are 10% or more higher than a year earlier.
Where it fits
Unemployment starts to rise. The argument predicts: Unemployment starts to rise within a few months of a market crash, and the jobs lost in work exposed to AI are not regained.
Other possible causes. Every recession triggers these signals, and most of the jobs lost are later regained.
A trigger can count as evidence for point 5 of our view, a recession in which spending fails.
The prediction
Open Set 8 Oct 2026
- If we are wrongtriggers, then stops
- Now−12.4%24 Oct 2026
- Start−11.5%19 Sep 2026
- If we are right10.0% or aboveby 27 Mar 2027
- Severe117.4%as in 2007–09
If our view is right, this signal triggers by 27 Mar 2027: with the hiring rate at its lowest in two years, the change over a year in continuing jobless claims reaches 10.0% or above. The date comes from the model, in which US unemployment's rise over twelve months is by then larger than 99% of twelve-month changes from 1990 to 2019. A downturn of that size would be expected to show in this measure as well.
If it triggers and then stops being triggered for four consecutive weeks, that counts against our view, which expects a downturn to deepen for several years once it begins. The deadline refers to the period the data cover. If it passes without a reading of 10.0% or above, that counts somewhat against our view.
When the rule was set
The rule was set on 24 Sep 2026, when it was not triggered. Its threshold is chosen by the author.
How often it has been on
Applied to past data at the end of each month from Apr 2003, using only what had been published by then, it was on in 7% of months to 2019 and 17% since 2020. More than six months from any US recession as dated by the National Bureau of Economic Research, it triggered once, in Apr 2023. The rule was set with these years in view, so these figures cannot show how well it predicts.
Past triggers
On the data published at the time, it triggered in Mar 2008, May 2020 and Apr 2023.
Source: US Bureau of Labor Statistics (JOLTS) via FRED; US Department of Labor via FRED.