Recession Fears Resurface as Jobless Claims Skyrocket Despite Inflation

Jobless claims surged to a near four-year high of 263,000 in August, signaling weakening labor market conditions and casting doubt on the resilience of the U.S. economy. Investors ignored hotter-than-expected inflation data released earlier, instead focusing their attention on the alarming rise in unemployment claims. The combination of persistent inflation and slowing growth has triggered renewed concerns about stagflation, a dire economic condition where high prices co-exist with stagnant growth. Despite this, market expectations remain focused on an upcoming Fed rate cut next week.