Claudia Sahm: My recession rule was made to be broken

Despite the Sahm rule indicating a recession following a weak jobs report, the US economy shows no clear signs of a significant downturn. While the Sahm rule is a valuable early warning tool, its current reading may be overstating the risk due to labor supply increases. Still, the Federal Reserve should consider cutting interest rates as a precautionary measure, given the elevated recession risk and the mixed economic signals.

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By Claudia Sahm

The US is not in a recession, despite the indicator bearing my name saying that it is. The Sahm rule, which was triggered with Friday's weaker-than-expected jobs report, joins a long list of economic tools skewed by the unusual disruptions of the past four and a half years.

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