I created the Sahm rule—a widely followed and highly accurate indicator of a recession—based on labor market conditions. Specifically, if the three-month average of the unemployment rate is ½ percentage point or more above its low over the prior twelve months, then the US is in the early months of a recession. The Sahm rule has triggered within, but never outside, every recession since the 1970s.
Expertise
I developed the Sahm rule as an automatic trigger for relief programs in recessions. It exemplifies my data-driven problem-solving skills. My rule is in the Bloomberg terminal, FRED, and Haver.
Pictured
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