Claudia Sahm warns: the economy's signals are shifting beyond the usual alarms

Economist Claudia Sahm argues the economy has quietly shifted: hiring remains weak even as unemployment looks tame, immigration and political pressure are reshaping the labor pool, and traditional recession indicators may no longer signal trouble. She urges policymakers to focus on the labor market rather than relying on the Sahm Rule, warning that institutions like the Fed could drift under political pressure. With AI displacement and a leadership change at the Fed adding uncertainty, the usual toolkit for stimulating demand may not fit the current cycle.