Danielle DiMartino Booth, CEO of QI Research, believes that the US economy is already in a recession. According to Booth, rising job losses and downward labor revisions indicate that a downturn has already arrived. She mentioned that there have already been 22,000 job loss announcements in the month of May, leading to a significant increase in seasonal job losses.
In recent months, Booth has been warning of a recession using data from Goldman Sachs that shows when the unemployment rate’s three-month average increases by 0.3 percentage points from its 12-month low, a recession is likely. Based on this indicator, the rule was triggered in October of last year with 192,000 job losses reported through the third quarter of 2023.
Fresh data continues to show a worsening labor market environment as April’s job report indicated a significant slowdown in nonfarm payrolls added and unemployment rose slightly to 3.9%. The trend is expected to continue as layoffs are increasing with severance packages expected to decrease from 60 to 90 days compared to six-to-nine months packages offered in the past.
Other analysts are also projecting a rising risk of recession as economist David Rosenberg warned of a potential hard landing by the end of the year which could lead to a surge in unemployment rates up to 5%. The US economy is facing significant challenges with mounting job losses and prospects for a recession becoming increasingly likely.
In conclusion, Danielle DiMartino Booth believes that we are already experiencing an economic recession due to rising job losses and downward labor revisions indicating that it’s time for policymakers and businesses alike to take action before it’s too late.
