“Fears have ticked up since Friday because the unemployment rate has risen enough in the past year to trigger a statistical threshold, known as the Sahm rule, that has historically been a sign that we’re in the early stages of recession.
But the U.S. economy actually still looks fine: Joblessness is at 4.3 percent, which is only bad by comparison to 3.4 percent, where it stood in early 2023. A higher percentage of people in their prime working years are employed than at any point since 2001, and the unemployment rate — which measures the number of people looking to be employed against the total number of people participating in the labor force — has risen largely because more people are seeking work, including immigrants.
U.S. GDP grew at a 2.8 percent pace in the second quarter of the year, which is faster than would be expected, especially given how high interest rates are. (Recessions are associated with an economy that is contracting, not expanding.)
Claudia Sahm, the creator of the Sahm rule, said that she doesn’t think we’re in a recession and that this time her rule might not hold.
But one thing seems clear: The economy is now slowing. The question is how much and how fast.”
https://www.politico.com/news/2024/08/05/how-to-make-sense-of-market-turbulence-00172647