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Stock Market Freakout, Claudia Sahm on the Sahm Rule, Buffett Sells Apple

The Compound and Friends

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Understanding the Sahm Rule

This chapter explores the Sahm Rule, an economic indicator developed to forecast potential recessions by analyzing the three-month moving average of unemployment rates. The discussion provides insights into its origins, operational mechanics, and the importance of historical context when interpreting current economic trends. Additionally, it highlights the interplay between consumer behavior and economic policy, particularly in light of recent upheavals caused by the pandemic, and how these factors influence the reliability of traditional recession signals.

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