Global financial markets have been shaken by a sudden decline, raising concerns about the potential slowdown of the US economy. Recent jobs data has intensified these worries, as the American business sector added only 114,000 jobs in July, significantly lower than the expected 175,000. The unemployment rate also rose to 4.3%, its highest level in nearly three years, triggering the 'Saham Rule,' which suggests the onset of a recession if the average unemployment rate exceeds previous lows by half a percentage point.
The Federal Reserve's recent decision to maintain interest rates, unlike other major central banks, has further fueled speculation about the US economy's direction. Chairman Jerome Powell hinted that a rate cut could be considered in September, but the delay has raised concerns about missing opportunities to stimulate economic growth. The technology sector has also played a role in market volatility, with significant job cuts announced by companies like Intel and rumors surrounding Nvidia's product launch.
While the recent data and market reactions have prompted fears of a recession, experts urge caution. Claudia Saham, the economist behind the Saham Rule, emphasized that the economy is not currently in a recession, though the momentum may be concerning. Economists suggest that the Federal Reserve may act sooner than planned if market panic escalates. Overall, despite the challenges, there remains hope for the US economy to navigate these turbulent waters without falling into recession.
