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.
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00:00It's Benzinga, and here's what's on the block.
00:02The SOM rule observes that a recession has started when the three-month moving average
00:06of the U.S. unemployment rate rises by at least half a percentage point above its low
00:10over the past year. The SOM rule was triggered in July 2024 based on weaker-than-expected jobs
00:16data fueling recession worries. Claudia Som, the economist the rule is named after, says while
00:21momentum is pointing to a recession, the U.S. is not currently in one based on strong consumer
00:26spending and incomes. Som advises not relying on any single tool or data point to determine
00:31the economic outlook. For all things money, visit Benzinga.com.