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In macroeconomics, the Sahm rule, or Sahm rule recession indicator, is a heuristic measure by the United States' Federal Reserve for determining when an economy has entered a recession. [1] It is useful in real-time evaluation of the business cycle and relies on monthly unemployment data from the Bureau of Labor Statistics (BLS).
This is nothing but a steeper version of the short-run Phillips curve above. Inflation rises as unemployment falls, while this connection is stronger. That is, a low unemployment rate (less than U*) will be associated with a higher inflation rate in the long run than in the short run. This occurs because the actual higher-inflation situation ...
The curve, named after William Beveridge, is hyperbolic-shaped and slopes downward, as a higher rate of unemployment normally occurs with a lower rate of vacancies. If it moves outward over time, a given level of vacancies would be associated with higher and higher levels of unemployment, which would imply decreasing efficiency in the labour ...
Typically, the rule suggests the US economy has entered a recession if the three-month average of the national unemployment rate has risen 0.5% or more from the previous 12-month low.
The “Sahm Rule” measures acceleration in the unemployment rate, which has jumped from a low of 3.4% last year to 4.3% now. Unemployment is still low. ... After all, other recession indicators ...
The U.S. unemployment rate ticked up to 4.1% in June from 4% in the prior month, nearly triggering a reliable recession indicator. While unemployment is still historically low, its rate of ...
By this measure, the 2008–2009 recession was considerably worse than the five other U.S. recessions from 1970 to present. By May 2013, U.S. employment had reached 98% of its pre-recession peak after approximately 60 months. [187] Employment recovery following a combined recession and financial crisis tends to be much longer than a typical ...
Workers in most states have 26 weeks of paid unemployment benefits, but according to the Bureau of Labor Statistics, 21% of workers are now taking more than 27 weeks to find a new job, up 3% from ...