Indicator is now 0.52 indicating early months of recession.
Sahm Rule: "When the three-month moving average of the national unemployment rate is 0.5 percentage point or more above its low over the prior twelve months, we are in the early months of recession."
caution:
"The Sahm rule is an empirical regularity. It’s not a proposition; it’s not a law of nature." -- Claudia Sahm
>The Sahm rule is a robust tool that has been very accurate in identifying a downturn in the business cycle and almost always doesn't trigger outside of a recession. The simplicity of the calculation contributes to its reliability. The Sahm rule signals the early stages (onset) of a recession and generated only two false positive recession alerts since the year 1959 (there have been 11 recessions since 1950); in both instances — in 1959 and 1969 — it was just a little untimely, with the recession warning appearing a few months before a slide in the U.S. economy began.[15] In the case of the false positive warning related to the year 1959 it was followed by an actual recession six months later. The Sahm rule typically signals a recession before GDP data makes it clear.[16]
>The Sahm rule is designed to indicate that the U.S. economy is in the early months of a recession, rather than forecasting future recessions.[17] While the historical performance and timeliness of the Sahm rule has been very accurate, the reliability of the Sahm rule in today's economy has been questioned by many economists (including Claudia Sahm) due to several distortions and there is reason to believe that the economy might act differently this time around due to unique unusual conditions.
...
> A lesser-known feature of the Sahm model is that it is particularly useful in assessing recession ends. The standard 3-month smoothed Sahm rule has on average a minimum two month lag to recession ends (while the unsmoothed-Sahm indicator provides for near perfect coincident signalling of business cycle troughs), according to Dwaine Van Vuuren.
Sahm Rule: "When the three-month moving average of the national unemployment rate is 0.5 percentage point or more above its low over the prior twelve months, we are in the early months of recession."
caution:
"The Sahm rule is an empirical regularity. It’s not a proposition; it’s not a law of nature." -- Claudia Sahm
https://en.wikipedia.org/wiki/Sahm_rule#Historical_Accuracy
>The Sahm rule is a robust tool that has been very accurate in identifying a downturn in the business cycle and almost always doesn't trigger outside of a recession. The simplicity of the calculation contributes to its reliability. The Sahm rule signals the early stages (onset) of a recession and generated only two false positive recession alerts since the year 1959 (there have been 11 recessions since 1950); in both instances — in 1959 and 1969 — it was just a little untimely, with the recession warning appearing a few months before a slide in the U.S. economy began.[15] In the case of the false positive warning related to the year 1959 it was followed by an actual recession six months later. The Sahm rule typically signals a recession before GDP data makes it clear.[16]
>The Sahm rule is designed to indicate that the U.S. economy is in the early months of a recession, rather than forecasting future recessions.[17] While the historical performance and timeliness of the Sahm rule has been very accurate, the reliability of the Sahm rule in today's economy has been questioned by many economists (including Claudia Sahm) due to several distortions and there is reason to believe that the economy might act differently this time around due to unique unusual conditions.
...
> A lesser-known feature of the Sahm model is that it is particularly useful in assessing recession ends. The standard 3-month smoothed Sahm rule has on average a minimum two month lag to recession ends (while the unsmoothed-Sahm indicator provides for near perfect coincident signalling of business cycle troughs), according to Dwaine Van Vuuren.