The Real-time Sahm Rule Recession Indicator is a tool that assesses the state of the economy using the unemployment rate.
The indicator determines that the economy is currently in a recession when the unemployment rate suddenly increases to 0.5.
“…rises by 0.50 percentage points or more relative to its low during the previous 12 months.”
The Sahm Rule Recession indicator tracks unemployment rates in real time using information from the U.S. Bureau of Labor Statistics.
However, new data are only made accessible once every month.
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Sahm Rule Recession Indicator for ThinkorSwim
# Indicator Name: Sahm Rule Recession Indicator
# Description: The indicator takes the unemployment rate and compares it to its 3-month average to determine whether or not a recession is likely.
# Version: 1.0.0
# Developer: Melvin C.
# URL: https://thinkscript101.com/sahm-rule-recession-indicator-thinkorswim/
declare lower;
plot Data = close("SAHMREALTIME:FRED");
plot Break = 0.5;
Data.SetPaintingStrategy(PaintingStrategy.LINE_VS_POINTS);
Data.SetdefaultColor(Color.Orange);
Break.SetDefaultColor(GetColor(1));
Usage
- Add the code to your ThinkorSwim chart.
- Set timeframe to Mo (Month).
- View with the S&P 500 Index.
- A reading above 0.5 indicates we are currently in a recession.
