SPY & Sahm Rule Recession Indicator
A real-time recession indicator that signals the start of a recession when the 3-month moving average of the unemployment rate rises 0.5 percentage points above its 12-month low.
SPY Price
Sahm Rule Recession Indicator
Signals recession when 3-mo avg unemployment rises 0.5% from 12-mo low
What It Measures
The Sahm Rule Recession Indicator, developed by economist Claudia Sahm, calculates the difference between: - The 3-month moving average of the national unemployment rate - The minimum unemployment rate over the prior 12 months When this spread exceeds 0.50 percentage points, it signals that a recession has likely begun. The indicator is designed to be: - **Real-time**: Uses data available at the time, not revised data - **Simple**: Based solely on the unemployment rate - **Timely**: Updates monthly with employment report
Why It Matters
**Real-Time Signal**: Unlike NBER's lagged announcements, the Sahm Rule provides a timely recession signal. **Perfect Track Record**: The rule has correctly identified every U.S. recession since 1970, with no false positives (though it triggered briefly in 2024). **Policy Trigger**: Originally designed to automatically trigger economic stimulus payments at recession onset. **Fed Watching**: The Federal Reserve and policymakers monitor this indicator closely. **Market Impact**: Crossing the 0.5 threshold generates significant market attention and volatility.
Key Levels
Data Sources
SPY: S&P 500 ETF daily OHLCV data (1993-02-02 to 2026-02-13)
Sahm Rule: SAHMREALTIME - Sahm Rule Recession Indicator from Federal Reserve Bank of St. Louis / Claudia Sahm
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