When we report on how great the economy's doing. What do you. Do you feel that?

I don't, I don't feel it. I don't doubt that it's gotten better, but nothing necessarily feels like it really got easier on us. I don't feel like I'm getting a break anywhere.

Earlier this year, my colleague Alisyn Camerota spoke with a number of Americans about the affordability crisis in this country. Rachel Gambino and Garrett Mizell both went to college. They have steady jobs. They're homeowners, parents to a nine month old boy. Sounds like the American dream right now. They say their paychecks aren't enough to keep up with college debt and a mortgage payment. Plus all the other regular expenses. And a second kid. Out of the question.

Once we started getting daycare. Costs, it was like, we cannot afford to have another child until he's in a public school system. I'd love for him to have like a partner in crime, but we can't afford to give him that for at least four years.

And is that sad?

Yeah. I'm sad. Like, our our family is dictated by our financials. And. Yeah, I just never thought it would be that that way.

This is the reality for so many millennials like Rachel and Garrett. And ever since the pandemic, inflation has only added to the cash crunch. But here's the thing experts say the data has been showing a strong economy for a while now, even if not everyone feels it. Inflation is on the way down. That's why the last few topsy turvy days for global stock markets has hit like a brick. So is this moment worthy of a freak out or a deep breath? My guest is Catherine Rampell. She's an opinion columnist at the Washington Post and a CNN economic commentator. We're going to talk about whether one subpar job support means we're headed towards a recession, or if a soft landing is still in the cards from CNN, this is One Thing. I'm David Rind.

So, Catherine, why has the stock market been on such a roller coaster ride the last couple of days?

There are many theories about this, but the main trigger seems to have been last week's job market report. So the Bureau of Labor Statistics releases its jobs report the first Friday of every month generally. We got those numbers last week and they were disappointing.

In the U.S. economy. Added just 114,000 jobs in July, marking a slower pace of growth than in recent months, the unemployment rate also unexpectedly ticking up higher. CNN's poll the.

Unemployment rate went up for the fourth month in a row to 4.3%. Job growth slowed, and while it wasn't, I think this sort of catastrophic report that many have made it out to be 4.3% unemployment is actually relatively low by historical standards. For example, it was disappointing enough that I think a lot of people freaked out, said maybe the fed has been behind the curve, has been waiting too long to start cutting rates.

We're a little over an hour before the opening bell on Wall Street, and we're already seeing a significant global market sell off Japan.

And I think there were a lot of investors who were maybe saying, for for a while as the markets kept hitting record highs. Look, the party's going to end sometime and then, you know, just can't keep going. And then this was the cue.

This is the worst trading day for stock markets in nearly two years. In the early minutes of the session today, we saw around $1 trillion worth of wealth wiped off.

Just a hand. So that said, was hoping that they would kind of cool down the economy, and they know that they would raise rates just enough to cool down inflation, but not so much that they put the economy into a deep freeze. You know, they didn't they didn't want to cause a recession. But it's really hard to calibrate it just right. And historically they have not been able to historically. Most of the time when we've had really high inflation and the fed raised interest rates to, to kill the inflation, it also killed the economy. So that has been the fear for a while. That's part of the reason why a year ago, two years ago, the consensus forecast on Wall Street was that we would have a recession. And it's only more recently that market participants, among others, have said, hey, maybe the fed could pull this off.

Right, I thought things were going well.

'Well, and I think they have been going well, actually, if you look at lots of other measures of the economy, the standard things that economists and traders look at, they've generally been doing well, like they have slowed down, you know, from their really supercharged pace. I'm talking about things like spending or consumer spending or, GDP growth or even hiring. Things have slowed down, but they haven't, like come to a complete halt. So things have generally been up until Friday's report generally has been, you know, supporting the the story that maybe the fed could pull off this so-called soft landing without crashing the economy. Friday's jobs report was slow enough that I think it it reignited these worries about a recession. And again, I don't actually think it was so terrible. 4.3% unemployment. Not bad. We still added jobs. The worry is that the trend is going in the wrong direction. All of which is to say, I think the soft landing is still quite possible. A recession is also possible, but I don't think we are like doomed because of this one report, which is one snapshot. So it may be that we we are still on that glide path to a soft landing. We don't know. We'll get more data in the next few weeks and hopefully it'll be encouraging.

Well, so then what is the next move here?

The fed doesn't meet again unfortunately until September. And so which wishes like you know decades. Yeah. In market time right. For a while now the expectation was that the fed was going to start cutting interest rates at its September meeting. And now the question is not will they? They will or at least that's what markets generally think. The question is instead how big of an interest rate cut will they will they put in put into place. Because if they think they are behind the curve, if there is worried about this jobs report, as the markets seem to be, then they'll say, oh man, we waited too long. Let's cut way more aggressively and hope we can stimulate the economy more and sooner than we were planning to do. But remember. September is a ways off. We will have another jobs report between now and then. We'll have a bunch of measures of inflation. And again, the tools that they have at their disposal are not super fine tools that they can use to like, calibrate things just right. Interest rates are more of a sledgehammer than a scalpel, and they got to use the sledgehammer one way or the other, and they could get it wrong.

So let's say that the fed does cut interest rates in September by a pretty sizable margin. How does that impact the average person and their finances? The person that's just seeing all this volatility and, you know, maybe dealing with the effects of inflation still and just wants to be able to have their dollar go a little farther.

Well we have already unfortunately seen inflation slowing down. Now to be clear there's a lot of confusion about this. Inflation slowing down is not the same thing as prices falling. They're just not rising as quickly. It's not intuitive but that's that's what they're aiming for. They're not looking for prices to fall. That's generally the sign of, of an economy really in trouble. Like that's what happened during the Great Depression. So on some level, even though it's for consumers, it's still seems pretty crappy out there. I don't, if I can say crappy on this side. Sure. Because, you know, you're still getting sticker shock every time you go to the grocery store, that milk or peanut butter or whatever. It's not getting cheaper. It's also not getting much more expensive. So manage expectations there. Like prices are not going down. But maybe they won't grow quite as quickly.

There's a ton of people out there that just continue to say that the economy's bad, that inflation is sky high, even if the data doesn't actually suggest that to that extent. I know you've written a lot about how just average folks perceive the economy and how that impacts like where things are going. Can you explain why some of those views are just still so baked in?

So this is complicated to talk about because on paper, you're right. The economy and in most respects looks great. But people feel lousy, crappy even. And I don't think they're making it up. I think the price growth that we have seen in the past couple of years was so fast and so painful that even if it has slowed down recently, the memory of how much cheaper things used to be is still fresh in their mind. So it's not so comforting to say, oh wow, peanut butter isn't continuing to get more expensive, or milk isn't continuing to get more expensive. I remember when it was a buck or two cheaper.

They can just look at their past bills and be like, look, I paid X amount, then why am I not paying that now?

Exactly. And I think that is a totally reasonable response. And it's not super satisfying to hear if you are in that position and you're mad about your grocery bills, you're having trouble affording them. Oh, well, you know, the economy here is doing way better than it is in France. You know, who cares? So I think both things can be true. You can say on paper, you know, incomes are actually rising and the economy is growing and we're adding jobs, but it still doesn't feel great.

After weeks of speculation, Kamala Harris has picked her running mate. She texted her supporters. We should note in just the last several minutes that she has picked Minnesota Governor Tim Walz...

Does this impact the election at all? Because CNN just got reporting that Kamala Harris is going to pick Minnesota Governor Tim Walz to be our running mate.

This guy comes out of nowhere. Two weeks ago, nobody even knew his name. Yeah. And he he lit up the grass roots. He lit up the internet. He was the first person to come out and define Donald Trump as weird.

They're going to go out all week to kind of sell their pitch to voters. And I assume part of that will be. Look, what we've done as the Biden administration to, improve the economic situation, to bring down inflation. But it sounds like, from what you're saying, that some of these views for people just might be kind of baked in and tough to overcome that hurdle of really telling them that, yes, things are on the way up.

'Yeah, I think it's really challenging how to talk about the success in the economy so far, which may or may not be related things. Biden, you know, Biden-Harris administration actually did I think a lot of it's due to the fed, among other things. It's hard to talk about how things are improving or things aren't as bad as they are in the rest of the world or whatever, without sounding tone deaf. Given that, again, consumers voters out there really are are frustrated and suffering and telling them how to feel is not super helpful. So I think the, you know, the right way to talk about this kind of issue is to say, look, here's the progress we've made, here's how we think we can make it even better. And to draw a contrast with the kinds of things that. Harris's opponent, Donald Trump, would do on the economy. Like it's easy for Donald Trump to say, oh, inflation would be so much better under me. And, you know, I'm going to fix the economy.

Called the stock market volatility the Kamala crash.

Right, right. If there were like a lever in the white House that control the stock market, then I'm sure, Joe Biden would have pulled it. I'm not sure. You know, his vice president would have had access to it, but either way, it doesn't exist. In any event, it's easy for Trump to say he would make things better. But then if you actually look at his policy proposals, pretty much all of the the major bullet points would make inflation and growth and probably jobs a lot worse.

When our middle class is strong, America is strong. But Donald Trump. Wants to take our country backward. He and his Extreme Project 2025 agenda. Will weaken the middle.

Class like so. You know, how does Kamala Harris talk about this? I think the main thing is just to say, look, we get it. You're struggling. We're moving in the right direction. And think about the following things that my opponent would do that would probably make the things you say you care about worse.

Katherine, thanks so much, I appreciate it.

Thanks for having me.

One thing is a production of CNN Audio. This episode was produced by Paola Ortiz and me, David Rind. Our senior producer is Faiz Jamil. Matt Dempsey is our production manager. Dan Diesel is our technical director. And Steve Lickteig, is the executive producer of CNN Audio. We get support from Haley Thomas, Alex Manasseri, Robert Mathers, John Dianora, Leni Steinhart, Jamus Andrest, Nichole Pesaru, and Lisa Namerow. Special thanks to Wendy Brundage and Katie Hinman. And I just want to say a very, very special thanks to Greg Peppers, who has been our supervising producer, instrumental in getting this show off the ground all those years ago. He is leaving CNN, but we couldn't have done this without him and wish him all the best going forward. We'll be back on Sunday. I'll talk to you later.