From: Jin Shi Data
Andrew Hollenhorst, chief U.S. economist at Citigroup, believes that a worsening labor market will lead to a rapid decline in the U.S. economy. In fact, he believes the economy will suffer a sudden change later this year.pikefishpunishment.
He told CNBC on Tuesday: "Companies are hiring fewer people and employees are working fewer hours. This gradual weakening trend has already begun and tends to snowball, eventually leading to what is more like a hard landing."
Although recent labor market data does not necessarily portend such a dire outcome, Hollenhorst believes that some reports reveal a more pessimistic environment than many people may realize. A hard landing is a troubling prospect because the economy could then enter a full-blown recession.
He cited survey data from the American Federation of Independent Enterprises (NFIB) as saying: "Small businesses tellpikefishWe, their hiring intentions are at the lowest level since 2016. If I look at the overall economy, the current hiring rate is the lowest since 2014. In other words, the recruitment rate is now the lowest in a decade."
Although the NFIB data only briefly fueled bearish sentiment, Hollenhorst said the recent sharp decline compared with previous months was noteworthy.
Even when viewed as a whole, there are reasons to worry about the prospects of the labor market. For example, Hollenhorst believes that while the national unemployment rate remains at 3.pikefish.9%, but this is similar to the previous 3%.pikefishThere is a big change from the.5% low.
Hollenhorst predicts that rising unemployment above 4% could prompt the Federal Reserve to start cutting interest rates as early as July. Overall, he believes interest rates will be cut four times before the end of 2024.
Other analysts have also issued hard landing forecasts related to the deterioration of the labor market. Senior forecaster Danielle DiMartino Booth said an unemployment indicator suggests a recession has arrived.
At the same time, Hollenhorst said a rate cut in July was more likely due to the prospect of a hard landing and weak economic activity. Specifically, he believes that the Fed's long-term policy of high interest rates is eroding corporate profits at a time when consumer savings are exhausted.
