Recession Fears Rise Despite Strong Labor Market

Despite strong job growth under the Biden administration, recent economic indicators, such as the rising unemployment rate and a slowdown in manufacturing, have fueled recession fears. While some economists believe these concerns are overblown, the Sahm Rule, a historically accurate recession predictor, suggests the US might already be in a recession. This shift in economic outlook has spooked investors, leading to stock market declines. The Federal Reserve`s response to these developments, particularly regarding interest rate cuts, will be crucial in determining whether the US can achieve a "soft landing" or if a recession becomes more likely.