Upcoming Jobs Report May Trigger Key Recession Indicator

Economists debate the significance of the Sahm Rule as unemployment nears critical threshold.

The Sahm Rule indicates a recession if the unemployment rate's three-month average rises by 0.5% from its 12-month low.
Friday's jobs report could trigger this rule if unemployment reaches 4.2%.
Some experts argue that current labor market dynamics, including increased labor supply, may distort the indicator.
Goldman Sachs highlights that the layoff rate remains historically low, mitigating recession concerns.
The Federal Reserve has tools to counteract economic downturns if necessary, including potential interest rate cuts.