# Sahm Rule Devised by [[Claudia Sahm]] in 2019: when the three-month average [[Unemployment Rate]] rises half a point above its low from the prior twelve months, a recession has — historically, always — already begun. Designed not as punditry but as an automatic trigger for stimulus payments, removing recession-response timing from politics entirely (the opposite spirit of how indicators usually get used). Its political moment came in August 2024, when rising unemployment technically triggered the rule weeks before a presidential election — instant "the recession has begun" messaging. Sahm herself publicly argued the trigger was distorted by post-pandemic labor-supply surges and that no recession was underway; she was right, and the episode became the rare case of an indicator's creator successfully fighting its weaponization in real time. Lesson for the folder: mechanical rules built on historical regularities break exactly when the underlying economy changes shape — same story as [[Yield Curve Inversion]]. ## Latest reading *As of 2026-10-07 · refreshed monthly · the cross-indicator read lives at [[State of the US Economy]].* - **September 2026: 0.00.** The trigger is **0.50**: the 3-month average unemployment rate rising half a point above its lowest 3-month average of the prior 12 months. Unemployment was 4.1%, 4.1% and 4.2% in July through September, so the 3-month average sits at its 12-month low. - **Last trigger:** the **July 2024 reading of 0.53**, released Aug 2, 2024. It stayed at or above 0.50 through September 2024, and no recession was dated. Since then the indicator peaked at **0.43** (November 2025). There is no October 2025 value because the shutdown cancelled that month's household survey. - **Why it reads zero in a stalling labor market:** the rule watches *unemployment*, and unemployment has barely moved. Low firing plus low hiring keeps it quiet. See [[JOLTS]] and [[Initial Jobless Claims]]. *Sources:* [FRED SAHMREALTIME (St. Louis Fed, the series' publisher)](https://fred.stlouisfed.org/data/SAHMREALTIME.txt) · [FRED UNRATE (BLS data)](https://fred.stlouisfed.org/data/UNRATE.txt) · [CRS Insight IN12410](https://www.everycrsreport.com/reports/IN12410.html) · [BLS Employment Situation](https://www.bls.gov/news.release/empsit.nr0.htm) ## See Also - [[Unemployment Rate]] — the input series - [[NBER Recession Dating]] — the official call the rule tries to front-run