The Sahm Rule observes that a recession has started when the 3-month moving average of the US unemployment rate rises by at least half a percentage point above its low over the past year. The Sahm Rule was triggered in July 2024 based on weaker-than-expected jobs data, fueling recession worries. Claudia Sahm, the economist the rule is named after, says while momentum points to a recession, the US is not currently in one based on strong consumer spending and incomes. Sahm advises not relying on any single tool or data point to determine the economic outlook.
