The Sahm Rule With The Eponymous Economist : Planet Money Economist Claudia Sahm explains the eponymous Sahm Rule, and how changes in the unemployment rate point to whether or not we are in a recession.
NPR logo

The Sahm Rule With The Eponymous Economist

  • Download
  • <iframe src="https://www.npr.org/player/embed/783120728/783128068" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
The Sahm Rule With The Eponymous Economist

The Sahm Rule With The Eponymous Economist

The Sahm Rule With The Eponymous Economist

  • Download
  • <iframe src="https://www.npr.org/player/embed/783120728/783128068" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
JLGutierrez/Getty Images
Business graph unemployment and inflation in newspapers
JLGutierrez/Getty Images

Claudia Sahm spent 12 years as a research economist at the Federal Reserve. During her tenure, she came up with the Sahm Rule, a method of using changes in the unemployment rate to pinpoint whether or not we are currently in the middle of a recession.

She explains how the Sahm Rule can more quickly determine if the economy is in a recession than other indicators macroeconomists use. She also proposes how policymakers should react when the Sahm Rule is "triggered." And finally, she uses the Sahm Rule to answer the question: are we in a recession right now?

To read more, find her paper here: https://www.brookings.edu/research/direct-stimulus-payments-to-individuals/

Music by Drop Electric. Find us: Twitter / Facebook / Newsletter.

Subscribe to our show on Apple Podcasts, PocketCasts and NPR One.