Psy's cold knowledge
What is Sam's Law?
Sam's Law is actually a simple economic observation method, just like we use our eyes to look at the thermometer to judge whether the weather is getting colder. This method mainly looks at how the unemployment rate in the United States changes. Imagine that if you record your home electricity usage every month, and then calculate the average electricity bill for the past three months, and then compare it with the lowest electricity bill last year, if the average electricity bill for these three months this year is much higher than the lowest time last year, then you may feel that your home is using more electricity,
It may be that the weather is getting colder, or that the home appliances are used more. Sam's Law is similar to this, but it looks at the unemployment rate.
If the average unemployment rate in the past three months has risen by more than half (that is, 0.5 percentage points) compared to the lowest unemployment rate in the past year, it is like a signal telling us that the economy may be in trouble, a bit like winter is coming, and everyone needs to wear more clothes to prepare for winter. The advantage of this method is that it is simple and easy to understand,
But it also has a limitation, that is, it is more like telling us that the economy has begun to cool down, rather than telling us in advance when winter will come. Therefore, when we use it, we must also combine it with other information, such as weather forecasts (just like other economic indicators), to more accurately judge the economic situation.
