Another consideration is that non-linear dynamics could take hold if the unemployment rate increases by a certain amount, as suggested by the Sahm rule, which holds that recessions have in the past occurred whenever the three-month moving average of the unemployment rate rises 0.5 percentage point over its minimum rate over the previous 12 months.
9 We certainly need to be alert to this possibility, but the past is not always prescriptive of the future. The current situation is unique. We’ve never seen a vacancy rate of 7 percent before.