Rising Debt Spurs Recession Fears: Key Indicators to Watch
30.07.2024 12:30 2 min. read Alexander Stefanov
The U.S. debt level surpassed $35 trillion on July 29, amplifying worries about the economy and a possible recession.
A crucial indicator to monitor is the Sahm Rule, which triggers a recession alert if the unemployment rate climbs 0.5 percentage points above its lowest point in the past year. Currently at 0.43%, it is nearing this critical threshold. If unemployment reaches 4.2% in the upcoming jobs report on August 2, the rule will signal a potential recession.
The anticipated July jobs report, set for release on Friday, predicts an addition of 200,000 jobs and a slight drop in unemployment from 4.1% to 4%. Average hourly wages are expected to rise by 0.2%, reflecting a 3.7% increase year-over-year. Seasonal hiring, particularly in leisure and hospitality, is likely to influence these figures.
Adjustments for July are historically challenging, and any deviations from the forecast could point to stronger hiring trends.
As Wall Street awaits a possible interest rate cut from Federal Reserve Chairman Jerome Powell in September, some experts believe earlier action might be necessary. Former New York Fed President Bill Dudley, who initially supported prolonged high rates, now advocates for an immediate rate cut.
He cites a slowdown in consumer spending, increased car repossessions, and rising loan delinquencies as reasons for his shift. Dudley warns that delaying rate cuts could exacerbate the risk of a recession.
-
1
U.S. Imposes New Tariffs as Trade Dispute with Canada Escalates
12.03.2025 9:00 1 min. read -
2
Cathie Wood Sees Recession Risks, Predicts Policy Shift
19.03.2025 11:00 1 min. read -
3
Federal Reserve Holds Rates Steady as Economic Uncertainty Mounts
19.03.2025 20:03 1 min. read -
4
U.S. Senate’s Approval of Funding Bill Creates Tension Among Democrats
16.03.2025 15:00 2 min. read -
5
Fed Signals Rate Cuts, but Market Uncertainty Persists
24.03.2025 10:00 2 min. read
Trump Implements Global Tariff Plan, Triggering Bitcoin Price Drop
In a recent live address, U.S. President Donald Trump declared that a new base tariff of 10% would be applied universally to all countries.
Global Economic Pressures Mount as U.S. Trade Policies and Inflation Concerns Persist
Consumer spending in the U.S. showed weaker-than-expected growth in February, increasing only 0.1%, which was on the lower end of economists’ forecasts.
US PCE Inflation Holds Steady at 2.5% in February, Core Index Surpasses Expectations
In February, the U.S. maintained its annual inflation rate at 2.5%, as reflected in the Personal Consumption Expenditures (PCE) Price Index, according to data released by the Bureau of Economic Analysis.
Stagflation Fears Loom, Yet UBS Identifies Key Investment Areas
UBS has issued a stark warning to investors, flagging stagflation as a looming economic threat.
-
1
U.S. Imposes New Tariffs as Trade Dispute with Canada Escalates
12.03.2025 9:00 1 min. read -
2
Cathie Wood Sees Recession Risks, Predicts Policy Shift
19.03.2025 11:00 1 min. read -
3
Federal Reserve Holds Rates Steady as Economic Uncertainty Mounts
19.03.2025 20:03 1 min. read -
4
U.S. Senate’s Approval of Funding Bill Creates Tension Among Democrats
16.03.2025 15:00 2 min. read -
5
Fed Signals Rate Cuts, but Market Uncertainty Persists
24.03.2025 10:00 2 min. read
