Our investment and economic outlook, July 2024
A labor market indicator that has reliably signaled the start of recession could appear in coming months. The Sahm rule (named after the former Federal Reserve economist who identified it) is triggered when the unemployment rate spikes, with its three-month moving average jumping half a percentage point above its 12-month trough. A 4.2% unemployment rate in the July jobs report, scheduled to be released August 2, would do the trick. Would that mean a U.S. recession had started? Very doubtful, said Adam Schickling, a Vanguard senior economist who studies the labor market.