Indicators · Households
People leaving the workforce
Close to triggering Direct evidence
80.7% of Americans aged 25–54 were in work in Oct 2026. Over two years their employment rate is down 0.30 percentage points and their unemployment rate up 0.07 percentage points (three-month averages).
The change in the employment rate over two years is lower than 69% of the readings since 1990.
US recessions Periods when this signal was on
What it measures
The change over two years in the share of Americans aged 25–54 who are in work, and in their unemployment rate.
Why it matters
People who lose their job and stop looking for work are not counted as unemployed. When employment falls this way, the unemployment rate does not rise, and support that depends on a rise in unemployment does not start.
When it triggers
Triggers when the employment rate of 25–54-year-olds is 0.4 percentage points or more lower than two years earlier while their unemployment rate is no more than 0.2 points higher (three-month averages). Once triggered, it stays triggered while the employment rate is at least 0.3 points lower than two years earlier and the unemployment rate no more than 0.3 points higher.
Where it fits
What happens to people who lose their jobs. The argument predicts: Employment among 25–54-year-olds falls while their unemployment rate stays level, and health care and social assistance keep hiring while private jobs outside them stop growing.
Other possible causes. Recoveries in which hiring lags, an ageing population, or government hiring and job cuts.
The prediction
Open Set 8 Oct 2026
- If we are wrong0.73 points or above
- Now−0.30 pointsOct 2026
- Start−0.33 pointsSep 2026
- If we are right−0.40 points or belowby Sep 2028
Its rule had already triggered when our view was formed, on the Aug 2026 reading of −0.47 points: that reading prompted the view and is not evidence for it. If our view is right, the change over two years in the employment rate of 25–54-year-olds reaches −0.40 points or below by Sep 2028, the threshold at which its rule triggers. The date is two years after the start, the span the rule measures. The prediction is met only when the rule triggers, which also needs the unemployment rate of 25–54-year-olds to be no more than 0.2 percentage points higher than two years earlier. Reaching it counts as evidence only if no US recession signal was on during the period it measures, or in the three months after, and the prices US businesses charge were not rising faster than in 95% of quarters from 1990 to 2019.
If it is at 0.73 points or above on two consecutive readings, that counts against our view. That level is the start, −0.33 points, raised by 1.06 points, the median size of its change over two years (the span its rule measures) from 1990 to 2019. The deadline refers to the period the data cover. If it passes without a reading of −0.40 points or below, that counts somewhat against our view.
When the rule was set
The rule was set on 25 Sep 2026, when it was already triggered. Its threshold is chosen by the author. When the rule was set, the reading was −0.467 points, against a threshold of −0.4.
How often it has been on
Applied to past data at the end of each month from Jan 1990, using only what had been published by then, it was on in 3% of months to 2019 and 4% since 2020. More than six months from any US recession as dated by the National Bureau of Economic Research, it triggered in Feb 2004, Jun 2011, Apr 2022 and Sep 2026. 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 Feb 2004, Jun 2011, Apr 2022 and Sep 2026.