Sahm rule signals start of recession

fred.stlouisfed.org

The Sahm Recession Indicator signals the start of a recession when the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more relative to its low during the previous 12 months.

It's now 0.53 > 0.5, signaling the possible start of a recession.

The lower field (rendered similarly to how the volume is usually rendered on stock markets or currency exchanges) might provide some related data, for example the total $ earned.

Why the parameter of the moving average is chosen to be 3 months?

Ye that's a good question on why is it a 3 month moving average, and not say a 1, 2, 3 ..., 12 month average - I made a Google Sheets covering the Sahm Rule until 1930 (Great Depression times) (graph I linked only goes to 1959).

Red is Sahm Rule. Blue is just 1 year change of Unemployment. I also added an indicator to just average across 12 months if the Sahm Rule was triggered - maybe that's better of an indicator.

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