A real-time recession indicator that triggers when the three-month moving average of US unemployment rises 0.5 percentage points above its 12-month low. It has preceded every US recession since 1970 with no false positives.

Who is Claudia Sahm?

An American macroeconomist who created the Sahm Rule during twelve years at the Federal Reserve Board. She is now Chief Economist at New Century Advisors.

Is the Sahm Rule triggered in 2026?

With US unemployment at 4.4% in February 2026 and payrolls falling 92,000, the indicator is at or near its recession threshold. Whether it formally triggers depends on the prior 12-month unemployment low.Source: BLS

Background

An American macroeconomist, Sahm developed the rule during twelve years at the Federal Reserve Board (2007-2019). She now serves as Chief Economist at New Century Advisors and maintains a widely-read Substack newsletter, Stay-At-Home Macro. Her PhD is from the University of Michigan. Her policy focus centres on automatic fiscal stabilisers that trigger without congressional action.

Claudia Sahm's eponymous recession indicator is under direct scrutiny as US unemployment reached 4.4% in February 2026 and nonfarm payrolls fell 92,000 against a consensus of +50,000. The Sahm Rule triggers when the three-month moving average of unemployment rises 0.5 percentage points above its 12-month low, a threshold that has preceded every US recession since 1970 with no false positives.

The 2026 debate adds a new variable her rule was never designed for: whether AI is an accelerant to structural unemployment that the Sahm Rule would misread as cyclical. If AI-driven hiring freezes push unemployment above the threshold but the economy is restructuring rather than contracting, the rule's perfect record faces its first genuine ambiguity.