FRED Adds Sahm Rule Recession Indicators



FRED has added both the current and real-time Sahm Rule recession indicators, created by economist Claudia Sahm as part of a policy proposal for the book "Recession Ready: Fiscal Policies to Stabilize the American Economy."

The Sahm Rule predicts the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months. The current series is calculated using the revised values for the unemployment rate (UNRATE series in FRED), while the real-time series is calculated using only the unemployment rate (and the recent history of unemployment rates) that were available in a given month.

Sahm is Chief of the Consumer and Community Development Research Section at the Board of Governors of the Federal Reserve System.