The speaker counters the argument that strong GDP growth alone can prevent a recession by pointing to historical examples such as the 1970s and 1980s, when multiple recessions occurred despite high GDP growth. They also mention that the labor market has remained strong despite the yield curve inversion, which is typically followed by a rise in the unemployment rate. However, they caution that it may still be too early to conclude that the labor market is out of the woods, as most deterioration tends to happen between month 16 and month 24 after the inversion. They predict that by the end of the year, the unemployment rate could rise above four percent, which may indicate a weakening labor market.
