What the Sahm rule indicator measures
The Sahm rule, proposed in 2019 by economist Claudia Sahm, compares the three-month average of the national unemployment rate with its lowest three-month average over the previous 12 months. When the difference reaches 0.50 percentage points or more, the economy has historically been in the early months of a recession. We calculate it from the current unemployment rate data; FRED’s real-time version uses the figures as first published, so the two can differ by a few hundredths.
How to read this chart
Most of the time the indicator sits near zero. Before 2024 every time it crossed 0.50 the US was in, or just entering, a recession (grey bands) – usually within three or four months of the start. The rule is designed to catch a turning point quickly, not to forecast one: unemployment tends to rise slowly at first and then accelerate once layoffs spread.
The latest reading in context
- At 0.00%, the latest reading is below its 5-year average of 0.14% and below its 10-year average of 0.55%.
- Of all 930 monthly readings since March 1949, 34% were lower than today’s and 55% were higher.
- Direction: up 0.07 points over the past month; down 0.20 points over the past six months; down 0.23 points over the past year.
- The highest value on record is 9.43% (June 2020, 6 years ago); the lowest is −0.40% (September 2021, 5 years ago).
- The full history spans 12 US recessions, shaded grey on the chart.
Why it matters
Sahm designed the rule as an automatic trigger for stimulus payments, so that help would reach households early in a downturn instead of waiting for official recession dates, which come many months later. It has since become one of the most quoted real-time recession signals. In mid-2024 it crossed 0.50 without a recession following, largely because unemployment rose as the labor force grew rather than through mass layoffs – a reminder that no single indicator is infallible.
What moves the Sahm rule indicator
- Layoffs and slower hiring, which raise the unemployment rate
- Growth of the labor force through immigration or rising participation
- Recent lows in unemployment: the lower the starting point, the easier the trigger
- Data revisions and gaps, such as the missing October 2025 reading
Key moments in its history
- 1970s–2000sCrossed 0.50 at or near the start of every recession.
- Feb 2008Triggered about two months into the Great Recession.
- Apr 2020Jumped to around 4 points, by far its highest reading.
- Jul 2024Crossed 0.50 without a recession, the first false signal in more than 50 years.
Sahm Rule Recession Indicator data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 0.84% | 9.43% | −0.40% |
| 2010s | 0.03% | 2.57% | −0.27% |
| 2000s | 0.67% | 3.97% | −0.10% |
| 1990s | 0.23% | 1.50% | −0.17% |
| 1980s | 0.45% | 2.50% | −0.33% |
| 1970s | 0.61% | 3.70% | −0.23% |
| 1960s | 0.19% | 1.80% | −0.23% |
| 1950s | 0.68% | 3.30% | −0.33% |
| 1940s | 2.50% | 3.33% | 1.10% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Sep 2026 | 0.00% | +0.07 pts |
| Aug 2026 | −0.07% | −0.03 pts |
| Jul 2026 | −0.03% | −0.10 pts |
| Jun 2026 | 0.07% | −0.03 pts |
| May 2026 | 0.10% | −0.03 pts |
| Apr 2026 | 0.13% | −0.07 pts |
| Mar 2026 | 0.20% | −0.07 pts |
| Feb 2026 | 0.27% | −0.03 pts |
| Jan 2026 | 0.30% | −0.05 pts |
| Dec 2025 | 0.35% | 0.00 pts |
| Nov 2025 | 0.35% | |
| Oct 2025 | n/a | not published |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
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Sahm Rule Recession Indicator: questions and answers
What is the Sahm rule threshold?
0.50 percentage points. When the three-month average unemployment rate is at least half a point above its low of the previous 12 months, the rule signals that a recession has likely begun.
Does the Sahm rule predict recessions?
It identifies them early rather than predicting them. Historically it was triggered within the first few months of a recession, well before the official dating by the National Bureau of Economic Research.
Why does this chart differ slightly from FRED's Sahm rule series?
FRED's SAHMREALTIME uses unemployment rates as they were first reported each month. This chart uses today's revised data, so values can differ by a few hundredths of a point.
Where does the data on this chart come from?
From the U.S. Bureau of Labor Statistics. ChartWidgets downloads the series (UNRATE) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 1, 2026.