Recession Fears Rise Despite Strong Labor Market

Despite strong job growth under President Biden, recent economic data has sparked recession fears. While July saw 114,000 new jobs, this was below predictions, and the unemployment rate has risen. The "Sahm Rule," an economic indicator, suggests these trends point to a recession. However, some economists, including the rule`s creator, believe the current situation is different and the economy remains strong. Despite this, investors are concerned, evidenced by stock market declines and increased volatility. 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 concern is that the Fed`s actions may be too late, potentially causing the recession they hoped to avoid.