| She seems pleasant. So why is everyone blaming her for the market collapse today?
Well, jokes aside, it’s obviously not so simple.
See, Miss Sahm came up with a simple rule for labeling “recessions”: the initial phase of a recession has started when the three-month moving average of the U.S. unemployment rate is at least half a percentage point higher than the 12-month low.
If that rule is true, and it has been accurate historically, then we officially entered a recession on Friday when the weak jobs report dropped.
But, according to CNBC, Miss Sahm herself is not convinced. She said on Friday that: “We are not in a recession now — contrary to the historical signal from the Sahm rule — but the momentum is in that direction. A recession is not inevitable and there is substantial scope to reduce interest rates.”
(It should be noted, since CNBC will not note this, that Sahm served under the Obama Administration, and therefore might have political motivations for softening the blow of her own rule in the heat of a fraught election cycle.)
In any case, whether we are or we are not in an official recession, things are pretty ugly in the markets right now:
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