The Sahm Rule — a key recession indicator for the Federal Reserve — was triggered in July after the three-month unemployment rate average increased. On the eve of the August jobs report, all eyes are on tomorrow's labor data print as it could influence how the Fed cuts interest rates in response.

Yahoo Finance host Julie Hyman uses the Sahm Rule and past unemployment data to assess the likelihood of a recession.

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This post was written by Luke Carberry Mogan.