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This accurate recession indicator is flashing red, but the ‘Sahm rule’ creator says ‘this time really could be different’

Fortune
Summary
Nutrition label

77% Informative

A weak July jobs report triggered one of the most well-known, and historically accurate, recession indicators: the Sahm Rule.

But the rule’s inventor, Claudia Sahm , pushed back against the doomsday narratives that gained traction after its triggering on Friday .

The Dow Jones industrial average sank 1.5% on Friday , while the S&P 500 and tech-heavy Nasdaq Composite plummeted 1.8% and 2.4% .

Growing chorus of Wall Street leaders and economists calling for interest rate cuts this week stands in stark contrast with Fed Chair Powell’s more hawkish Wednesday press conference.

Powell brushed off questions about the Sahm Rule earlier this week , calling it more of a “statistical regularity” than an “economic rule”.

VR Score

82

Informative language

84

Neutral language

20

Article tone

informal

Language

English

Language complexity

44

Offensive language

not offensive

Hate speech

not hateful

Attention-grabbing headline

not detected

Known propaganda techniques

not detected

Time-value

short-lived

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