considering some people.
Sahm’s Rule for Determining the Start of a Recession real time It is based on the 3-month moving average unemployment rate increasing by more than 50 basis points relative to the prior 12-month low. This is an image using the May 2022 employment release data.
resource: BLS, St. Louis Fed pass calculation Fredaccessed 15 June 2022.
See discussion of Sahm rules for OECD countries (including the US) here. This rule is very solid for the US. The reading for May was -0.07%.
In order for the Sahm rule to determine the start of a recession in June, the June jobs release must report an unemployment rate of at least 5.1%. A comparison with the May unemployment rate and the May 2022 survey of professional forecasters mean forecasts are shown in Figure 1.
figure 1: Unemployment rate (black), May professional forecaster survey mean forecast (blue), and minimum level to trigger a recession in June 2022 using Sahm’s rule (red square). The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, NBER, and author’s calculations.
Will it happen? certainly. possible. Do not.
