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 historically accurate recession predictor. However, even the rule`s creator believes the current situation is different, citing a strong economy heading in the wrong direction. Nevertheless, investors are concerned, evidenced by stock market declines and increased volatility. The focus now shifts from a potential "soft landing" to worries about a "hard landing," where the Federal Reserve`s efforts to combat inflation through interest rate hikes could inadvertently trigger a recession.