‘It Triggered’: Economist Who Created Recession Indicator Sounds Alarm After Dismal Jobs Report

Former Federal Reserve economist Claudia Sahm, who established the “Sahm Rule,” which has accurately predicted past recessions, warned the economy is on a concerning trajectory following a poor jobs report on Friday.

The “Sahm Rule” is an indicator of the onset of a recession and occurs when the three-month unemployment rate average increases by 0.5% or more compared to the lowest three-month average from the past year, according to the Federal Reserve Bank of St. Louis. Sahm on “Bloomberg Surveillance” responded “it triggered” when host Tom Keen asked if “the Sahm rule is in force at this moment,” due to new data from this month’s jobs report.