The Sahm Rule is a recession prediction indicator proposed by former Federal Reserve economist Claudia Sahm. This rule states that when the three-month moving average of the U.S. unemployment rate rises by 0.5 percentage points or more from the low point of the past 12 months, it usually indicates that the United States has entered the early stages of a recession. This rule is considered an effective tool for timely signaling of economic recession.#SahmRule