Lest You Be Lulled by the NFP Release: Employment Growth 1 yr before Recessions Figure 1: M/m annualized growth rate in nonfarm payroll employment in the runup to 2007-09 recession (red), to 2001 recession (teal), and assumed 2020 recession starting in January (dark blue). NBER defined recession dates shaded gray, starting at peak. Source: BLS via FRED, ALFRED, and author’s calculation. Update, 5:30pm Pacific: Forward looking indicators continue to suggest a slowdown. Figure 2: US economic policy uncertainty (EPU) index, 7 day centered moving average (gray, left scale), 10 year-3 month Treasury spread (blue, right scale), and 10 year-2 year Treasury spread (red, right scale), both in percentage points. Light orange shading denotes Trump administration, orange denotes Federal government closures. Source: policyuncertainty.com, and Federal Reserve Board via FRED, and Bloomberg (for 2/1).