Sahm rule

Is the labor market turning?

ProductionVerdict · PASSRecall · 0.75

Supporting · Lagging recession confirm · anchor metric: scalar, 0..1+ ppt

What it measures

The Sahm recession indicator: how far the 3-month-average unemployment rate has risen above its trailing 12-month low. Crossing +0.50 ppt has historically coincided with the start of every post-war recession.

u_3 = \text{3-month moving average of unemployment rate}

\text{sahm} = u_3 - \min(u_3 \text{ over trailing 12 months})

\text{recession trigger at } \text{sahm} \ge 0.50 \text{ ppt}

At 0.13 ppt the labor market is well under the 0.50 recession trigger. The reading is a confirm, not a forecast — it fires after the turn has begun, with very few false positives.

Limitations

Lagging — designed to confirm a turn, not anticipate it.
Smoothed — the 3-month average dampens single-print noise but adds lag.

In the product

The "Is the labor market turning?" cell in the Stress chapter; LAGGING recession-confirm voice in the commentary.

Grading & stability

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Gate rate
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Stability / churn
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Mean confidence
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Graded on the Tier-1 regime-test harness — curated macro events × 18-yr backfill × recall@K. Verdict PASS (75%).

Charts it reads

Labor market

labor—

Wage vs unemployment

wage_vs_unemployment—

Sahm rule · The Lens methodology← all engines