Recession Fears Rise Despite Strong Job Market

Despite strong job growth under the Biden administration, recent economic data has sparked recession fears. Although the economy continues to add jobs and doesn`t meet the formal definition of a recession, an increase in the unemployment rate has triggered the historically accurate "Sahm Rule" recession predictor.

While some economists, including the rule`s creator, believe the current situation is different and not indicative of a recession, investors are reacting to the data with concern, driving down stock prices.

This shift in outlook stems from the possibility that the Federal Reserve`s efforts to combat inflation by raising interest rates may now need to be more aggressive due to signs of economic weakening. This raises concerns that the Fed`s actions, while intended to stabilize the economy, could potentially trigger a recession.