June’s Bureau of Labor Statistics jobs report shows unemployment rising, signaling a continued slowing in the U.S. economy.

University of Pennsylvania Wharton professor Jeremy Siegel reacted to the data, recommending the Federal Reserve to cut interest rates in response.

What Happened: Siegel appeared on CNBC on Friday afternoon to discuss Friday’s “weak report.”

“I think it’s really time for Fed Chairman [Jerome] Powell to tee up in the July meeting a cut in September, and maybe another one in November,” Siegel said. “I think inflation is definitely under control and I don’t want to see this slowing economy turn into something worse.”

Siegel referenced economist Claudia Sahm‘s leading “Sahm Rule” as a means to predicting recessions. The threshold is met when the three-month moving average of the unemployment rate rises by 0.5% or more relative to the minimum of the three-month averages from the previous 12 months.

June’s figure is very close to approaching the 0.50%. A recession still should not be considered likely, Siegel says, especially if a September rate cut by the Federal Reserve would forestall a recession.

“Why not be preemptive? The commodity market is under control, all the others are under control. We’ve talked so long about the fact that if they used realistic shelter costs in their CPI, they [inflation indicators] would be much lower than what they have now. I think he [Powell] can afford to bring us a more normal Fed Funds Rate in relationship to those long rates…”

Why it Matters: The market is currently predicting a 77% chance for a September interest rate cut with additional cuts possible in November, according to the CME Group.

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