Sahm Rule vs 10Y-2Y Yield Curve
Sahm Rule (3-month MA unemployment 0.5pp above 12-month low) measures labor-market deterioration. 10Y-2Y Treasury spread (FRED T10Y2Y) measures yield curve shape.
Also known as: Sahm Rule Recession Indicator (Sahm rule, recession indicator, Sahm) · 10Y-2Y Yield Spread (yield curve, yield spread, 10-2 spread, 2s10s)
Why This Comparison Matters
Sahm Rule (3-month MA unemployment 0.5pp above 12-month low) measures labor-market deterioration. 10Y-2Y Treasury spread (FRED T10Y2Y) measures yield curve shape. April 2026: Sahm Rule triggered July 2024 (3-month MA U3 reached 4.1% above 3.5% trailing low); 10Y-2Y spread approximately +31bp (10Y 4.31% minus 2Y 4.00%; re-steepened from -110bp peak inversion July 2023). Combined April 2026: Sahm triggered for 21+ months without recession (longest in 54-year history) + yield curve re-steepened from deep inversion. Both major recession signals fired but no recession arrived. Most divergent setup since both indicators became reliable.
The April 2026 Configuration
Sahm Rule status: TRIGGERED since July 2024. 3-month MA U3 reached 4.1% (vs 12-month trailing low ~3.5% from September 2022). Difference 0.6pp above 0.5pp threshold. April 2026 U3 4.3% (3-month MA ~4.3%). Sahm Rule remains triggered.
10Y-2Y spread: ~+31bp (April 2026, 10Y 4.31% minus 2Y 4.00%). Positive (re-steepened). Compares to peak inversion -110bp July 2023 (highest since 1981).
The combined April 2026 reading: Sahm triggered + yield curve normalized. Both classic recession signals fired but recession did not arrive. 21+ months past Sahm trigger without recession (longest in 54-year history; previous longest 9 months).
Sahm Rule has been 100% accurate as recession predictor 1948-2024. April 2026 is potentially first false positive in modern history. Yield curve already produced false positive (deepest inversion since 1981 without recession). Both indicators may need recalibration for post-COVID economy.
Long-Term Range and Recent Trajectory
Sahm Rule history: triggered before every recession 1948-2024 (12 recessions). Average lead time 0-3 months. Maximum lead time 6 months (1953 recession).
2024 trigger: July 2024 (3-month MA reached 0.5pp above prior low). U3 trajectory: 3.5% September 2022 low to 4.3% April 2026 (+80bp over 3.5 years). Slow grinding rise without spike.
10Y-2Y trajectory: 2022-2023 inversion peaked -110bp July 2023. Inversion duration 24 months (July 2022 - mid-2024). Longest sustained inversion in modern history. 2024-2026 re-steepening: from -110bp to +31bp (140bp re-steepening).
Historical inversion-to-recession lag: average 12-18 months. -110bp inversion historically signals near-certain recession. Currently 32 months past peak inversion, no recession.
Range (Sahm Rule): 0% (no trigger) to 6%+ (recession). Threshold 0.5pp. Currently 0.6pp (just above threshold).
Range (10Y-2Y): -110bp (peak inversion 2023) to +275bp (peak steepness 2003-2004). Currently +31bp. Mid-range.
Historical Precedents: Past Episodes
2008-09 GFC: Sahm fired Q1 2008. Yield curve inverted 2006 -25bp peak (mild inversion). Recession started December 2007 (
90-Day Statistics
Explore Each Metric
Related Scenarios & Forecasts
Get daily macro analysis comparing key metrics delivered to your inbox. Stay ahead of market-moving divergences.
Frequently Asked Questions
What is the April 2026 Sahm Rule vs yield curve configuration?+
Sahm Rule TRIGGERED since July 2024 (3-month MA U3 0.6pp above 3.5% trailing low). 10Y-2Y spread +31bp (re-steepened from -110bp peak inversion July 2023). Both classic recession signals fired but recession did not arrive 21+ months later (longest divergence in 54-year history). Sahm Rule potentially first false positive in modern history. Yield curve already false positive.
Has the yield curve ever inverted without a recession?+
1966 brief inversion did not produce recession (only modern false positive). 2022-2024 inversion peaked -110bp (deepest since 1981) without recession 32+ months later. April 2026: longest sustained inversion in modern history (24 months) followed by re-steepening without recession. Yield curve recession signal weakened in post-COVID economy.
How should investors use Sahm vs yield curve signals?+
Yield curve as early warning (12-18 months lead historically). Sahm as confirmation (0-6 months lag). Combined: prepare on yield curve inversion, full risk-off on Sahm trigger. April 2026 anomaly: both signals fired but no recession. Suggests both need recalibration for post-COVID labor force expansion + AI capex era. Risk-off positioning may be premature.
What does the Sahm-Curve divergence imply?+
Sahm triggered + yield curve normalized (April 2026): unprecedented setup. Either (1) recession arrives delayed (yield curve normalization premature), (2) both indicators false positives (most likely), (3) Sahm un-triggers via U3 stabilization. Resolution typically 12-18 months. Cross-asset markets pricing scenario 2 (false positives, soft landing). Position cautiously but not aggressively recessionary.
Related Comparisons
Explore Across Convex
Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.