One of the most accurate recession indicators, known as the "Sahm Rule," is close to sounding the alarm as the unemployment rate in the US continues to rise. The Sahm Rule says that when the three-month moving average of the unemployment rate rises by at least half a percent from its low over the past year, a recession has likely begun. The creator of the Sahm Rule, economist Claudia Sahm, has warned that a rising unemployment rate can trigger a negative economic feedback loop even from low levels. Sahm has said the Federal Reserve risks causing a recession by not cutting interest rates more aggressively as the labor market weakens.
