The Sahm Rule has flashed, but there's a simpler recession indicator investors should be watching

"The Perkins rule asks whether payrolls are declining. Not rocket science," Perkins said in a note on Monday.

"True uncertainty is where we cannot assign probabilities, because the world is behaving in a way we haven't seen before. I think this applies to the current recession debate," Perkins said in a note this month.

"You have to keep an open mind, and not assume the economy will follow classic cyclical patterns. Leading indicators, yield inversion, perhaps even the Sahm rule, none of these rules seem reliable."

The Perkins Rule triggers when the jobs market contracts, focusing solely on negative monthly payroll reports to assess recession risk.

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