For the consideration of some people.

The Sahm Rule for determining a recession onset in real-time is based on a greater than 50bps increase in the 3-month moving average unemployment rate relative to its low in the preceding 12 months. This is the picture, using the May 2022 employment situation release data.

Source: BLS, St. Louis Fed calculations via FRED, accessed 6/15/2022.

See the discussion of the Sahm Rule for OECD countries (including the US) here. The rule is very reliable for the United States. The May reading is -0.07%.

In order for the Sahm Rule to determine a recession onset in June, the June employment situation release must report at least a 5.1% unemployment rate. How this compares against the May unemployment rate, and the May 2022 Survey of Professional Forecasters mean forecast, is shown in Figure 1.

Figure 1: Unemployment rate (black), May Survey of Professional Forecasters mean forecast (blue), and minimum level to trigger recession call in June 2022 using Sahm Rule (red square). NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER and author’s calculations.

Could it happen? Sure. Likely. No.