Overview

• 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.