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By Staff Reporters
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In October 2024, Bloomberg economists predicted a 100% chance of a recession coming in the following 12 months. But it didn’t happen. And recently, Goldman Sachs lowered estimation of the odds of the economy tipping into a recession in the next year to 15%. The bank’s chief economist described that number as the “unconditional long-term average”—which means there’s no more chance of the economy tanking now than in any other normal conditions.
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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. It is useful in real-time evaluation of the business cycle and relies on monthly unemployment data from the Bureau of Labor Statistic (BLS). It is named after economist Claudia Sahm, formerly of the Federal Reserve and Council of Economic Advisors.
The Sahm rule states: When the three month moving average of the national unemployment rate is 0.5 percentage point or more above its low over the prior twelve months, we are in the early months of recession.
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Filed under: "Ask-an-Advisor", Accounting, Financial Planning, Glossary Terms, Investing | Tagged: Bloomberg, BLS, books, CEA, claudia, Claudia Sahm, Council Economic Advisers, Goldman Sachs, Marcinko, recession, recession indicator, Sahm Rule, sports, Technology |
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