The latest unemployment data will play into the upcoming US presidential elections and any weakness will hurt the incumbent.

Amid current financial uncertainty, both investors and consumers are wary of a potential recession. Despite the guidance of indicators such as the inverted yield curve and the SAHM Rule, which are currently flashing red, predictions about economic downturns have been imprecise recently.⁶

The jump in the unemployment rate “points to a recession in 2025”, Gary Clyde Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics, told Al Jazeera. “I’m expecting the [US] Fed to start cutting the policy rate in September, and to continue cutting in subsequent meetings. That response will probably ensure a shallow recession,” he added.

Economists Goldman Sachs and Citigroup, among others, revamped their expectations to a half-point rate cut in September as well as in November, and a quarter-point rate cut in December.

of this falls on the back of a week of weak data, including a slowdown in manufacturing and negative employment sentiments, which points towards an economic downtrend.

‘Doesn’t signal a recession’

But not everyone agrees with this scenario.

“We don’t see a recession even though the stock market today is behaving like it anticipates a recession,” Nancy Vanden Houten, lead economist at Oxford Economics, told