This paper develops an algorithm that detects US recessions early and accurately by optimally filtering and combining unemployment and vacancy data. As of September 2025, the algorithm estimates a 64% probability that the US economy has entered a recession.
This paper develops the Michez rule, a fast and robust method to detect US recessions using data on unemployment and job vacancies. In December 2024, the rule gives a recession probability of 27%; this recession risk was first detected in March 2024.
This paper finds that in the United States the full-employment rate of unemployment (FERU) is the geometric average of the unemployment and vacancy rates. Between 1930 and 2024, the FERU averages 4.1% and is very stable.