Economist discusses the labor market, and what to expect from the Fed at Jackson Hole

While the Federal Reserve is looking to be on track start cutting interest rates in September, the Conference Board and Wells Fargo's Leading Economic Index (LEI) has been on the decline and edging closer to pandemic-era levels. Investors hope to hear more about Fed Chair Jerome Powell's monetary policy in his speech at the Jackson Hole Economic Symposium later this week.
Wells Fargo Senior Economist Tim Quinlan sits down with Julie Hyman and Josh Lipton to talk about these economic indicators and what they are inferring about recession risks.
"The biggest hurdle for the economy at this stage of the game is the slowing underway in the jobs market. And the reason that that becomes problematic is the consumer spending has become more reliant on real income as a driver of it," Quinlan tells Yahoo Finance. "If you're really reliant on the labor market, the labor market is weakening, kind of argues for a slower pace of growth at a minimum. But we don't see enough of a deterioration yet to push us into the recession side of things."
Quinlan comments on the weight on Powell's shoulders ahead of this week's Jackson Hole event and rate cut expectations from markets:
"How does Powell kind of come to grips with the fact that financial market expectations have moved as much as they have, without, at the same time, promising on any kind of a meaningful drop? It's a really difficult task that he has."
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