Why My Recession Rule Could Go Wrong This Time: Claudia Sahm

Alarm bells sounded Friday when we learned that the US unemployment rate rose to 3.9% for October, well above the 50-year low of 3.4% that it hit earlier in the year. The latest reading is still very low, so what’s with the doomsayers telling us a recession has arrived?

Relatively small increases in the unemployment rate, even starting from low levels, typically signal a recession. Where we are now is insufficient to make that call, but it’s worrisome. How do I know? Before the pandemic, I developed a highly accurate recession indicator, later named the Sahm rule. It would have ...