Recession Indicators Near Flashing: Insights from Claudia Sahm

Two recession indicators, the Sahm Rule and the yield curve, are on the verge of flashing, but stock market investors can still rest easy as the drivers behind each indicator are different than they were in the past. The rise in unemployment is being driven by an increase in labor supply, not economic weakness, and the yield curve is narrowing due to stronger-than-expected economic growth prospects. These factors suggest that the potential flashing of these indicators might not be enough to cause a recession or significantly impact the stock market and broader economy.