Sahm Rule Recession Indicator
Created by economist Claudia Sahm. Signals a potential recession when the unemployment rate's three-month moving average rises by at least 0.50 percentage points from its 12-month low.
Current Reading
0.00%
Latest reading, Sept 2026
Sahm Rule at 0.00% in September, up from -0.07% in August. Far below the 0.50% trigger.
Historical Data
How It Works
The indicator signals a potential recession when the three-month moving average of the unemployment rate rises by at least 0.50 percentage points from its low over the previous 12 months.
Why It Matters
Businesses typically exhaust cost-cutting measures before resorting to layoffs, meaning unemployment changes may appear after economic stress begins.
On FRED's real time series, the rule reached 0.50 in every US recession since 1970, between 1 and 3 months after the recession began. It also reached 0.50 in November 1976 and July 2024, and no recession followed either time.
Background
Claudia Sahm identified a consistent pattern while working at the Federal Reserve: unemployment rates tend to rise during the onset of recessions. She proposed it as a trigger for automatic payments to households when a recession starts.
Sahm set out the rule in a Hamilton Project paper published on 16th May 2019. A defining characteristic is its reliance on a single data series, the monthly national unemployment rate, making it simpler than indicators requiring multiple inputs.
Data Source
FRED series: SAHMREALTIME (real-time) and SAHMCURRENT (revised). Updated monthly.
Credit
Developed by economist Claudia Sahm. Updates available through her newsletter, Stay-At-Home Macro.