Two Faddish Indicators and Their Fatal Flaws

Lichtman’s “Keys to the White House” presidential election model is predicting Harris, while our model and Nate Silver’s are predicting Trump. The “Keys” do not have the perfect track record that is claimed, and the model is in fact only a subjective analytical framework. The “Sahm Rule” triggered its recession call with July jobs on a rounded basis, and with August jobs with full decimal precision. The rule is always late, by an average of 3.7 months. We erred Friday in saying the rule was not triggered with August jobs, but our erroneous calculation produces a better track record. Either way, a July or August trigger would mean the business cycle peaked something like four to five months ago, and that’s not supported by other data.