The US employment report for June continues to show a strong labor market that is consistent with a strong economy with moderating inflationary pressures. Employment is growing robustly, unemployment is low and stable, and nominal wage growth continues to slow, which should ease inflationary pressure. The one discordant note in the June data was a decline in labor force participation. But if one looks outside of the labor market, other economic data are telling a worrisome story of an economy that could be entering into recession even while the underlying inflation rate remains very high. There is some possibility ... (full story)