Will the Sahm Rule trigger at any point during 2026?

The Sahm Rule triggers when the three month moving average of the unemployment rate rises 0.5 percentage points above its minimum of the prior 12 months. As of my knowledge cutoff, unemployment in early 2026 was around 4.0 to 4.2 percent. For the rule to trigger by year end 2026, unemployment would need to rise roughly 0.5 percentage points or more from its 12 month minimum, reaching approximately 4.5 to 4.7 percent or higher. The June 2026 SEP shows Fed participants projecting the year end funds rate at 3.8 percent (up from 3.4 percent in March), indicating that Fed officials expect to maintain a restrictive stance through year end rather than ease substantially. This forward guidance and unchanged rates since June 17 suggest the Fed is not currently anticipating a sharp deterioration in labor market conditions that would trigger the Sahm Rule. However, given that only 5 months remain in 2026 and economic momentum could shift rapidly, there remains a non trivial tail risk of recession and accelerating unemployment.