Sahm Rule Gap (US Unemployment)

## What this measures

The 3-month average of the US unemployment rate minus its lowest 3-month average over the previous 12 months, in percentage points.

## Why it matters

Claudia Sahm showed that a gap of 0.5 points or more has marked the early months of every US recession since 1970. It reads how fast the labor market is turning, not how tight it is.

## How to read it

Near zero: unemployment is at or near its recent low. 0.5 and above: the recession threshold. It rose above 1.5 in 2008–09 and above 9 in spring 2020.

## What it does not say

It uses today's revised unemployment data, so historical readings can differ from what the rule showed in real time. It has given near-misses (2024) as well as hits.

## Source

Computed by Palanor from the BLS unemployment rate (`UNRATE`, public domain). Rule: Sahm (2019), "Direct Stimulus Payments to Individuals."