The JEC's Tim Kane (via email) uses his recession model
and interprets today's employment report
In this morning's BLS Employment Situation report for Jan 2008, the unemployment rate is 4.9. Therefore the new employment-based recession probability index (RPI) is 0.060 (or 6.0%).
The RPI is a combination of the two most valuable employment indicators of a recession's early stages: weekly initial unemployment insurance (UI) claims and the unemployment rate.
The 4-week moving average of initial UI claims was reported yesterday at 325,750, which is 17,000 lower than 4 weeks ago and essentially unchanged from the October average. Alone, trends in UI claims suggest a 4 percent recession probability. The unemployment rate is 0.1 points lower than December, but 0.1 higher than three months ago, suggesting an 8 percent recession probability. Combined, this yields an overall recession probability of 6 percent.
Other economists, I should note, are less sanguine.