Recession Fears Rise Despite Strong Labor Market

Despite strong job growth under President Biden, recent economic data has sparked recession fears. Although the economy added jobs in July, the pace of growth slowed, and the unemployment rate ticked upward. This triggered the "Sahm Rule," a recession predictor based on the acceleration of unemployment. While some economists, including the rule`s creator, believe the current situation doesn`t signify a recession, investors are reacting with concern, driving down stock prices. The focus has shifted from a potential "soft landing" for the economy to worries about a "hard landing" as the Federal Reserve prepares to cut interest rates. The key question is whether these cuts will come too late to prevent a recession.