Reported 2 months ago
The Sahm rule, formulated by economist Claudia Sahm, traditionally indicates a U.S. recession when the unemployment rate averages half a percentage point above its lowest point in the past year. Recent job reports suggest a rise in unemployment from 4.1% to 4.3%, meeting the rule's criteria; however, economists believe the rule may not apply currently due to unique economic conditions shaped by the COVID-19 pandemic and resulting labor market fluctuations. Despite the rise in unemployment, layoffs remain historically low, with many companies reluctant to cut staff after experiencing labor shortages. Sahm has indicated that a recession is not imminent, pointing to normalization in the labor market.
Source: YAHOO