Recession early-warning indicator developed by Fed economist Claudia Sahm. Triggers when the 3-month moving average of unemployment rises 0.50pp or more above its 12-month low. • Below 0.50: Safe zone • 0.50 or above: Recession signal Has correctly identified every US recession since 1970. While lagging (based on unemployment), it's the most reliable single indicator for detecting early-stage recessions.