The Sahm rule compares the three-month average unemployment rate with its lowest point in the previous twelve months. A rise of 0.50 percentage points or more has coincided with the start of every US recession since 1970. It is a coincident trigger, not a forecast: when it fires, the recession has usually already begun.
Threshold source: Sahm (2019), Brookings Institution. How thresholds are chosen
Every crossing in the record, including the ones that did not work.
| Crossed | Recession start | Lead or lag | False positive |
|---|---|---|---|
| Aug 2024 | None | — | Yes — peaked at 0.57, then reversed |
| Apr 2020 | Feb 2020 | 2 months late | No |
| Feb 2008 | Dec 2007 | 2 months late | No |
| Jun 2001 | Mar 2001 | 3 months late | No |
| Nov 1990 | Jul 1990 | 4 months late | No |
Sensitive to labour-supply shocks, such as immigration and participation, as in 2024, when it crossed and reversed without a recession. Does not apply outside the United States without recalibration, which is why the labour trigger uses a different series in every other region.