- The US economy may already be mired in recession, Danielle DiMartino Booth told Bloomberg TV.
- Downside labor revisions and rising job losses indicate a downturn has hit, the QI Research CEO said.
- She argues that by one unemployment indicator, a recession was triggered in October 2023.
The US is already mired in recessionary downturn, and rising job losses prove it, veteran forecaster Danielle DiMartino Booth told Bloomberg TV.
“Oh, my goodness, there’s already been 22,000 job loss announcements in the month of May and it’s still a fairly young month. So on a seasonal level, we’re seeing a major pickup,” the QI Research CEO said on Monday.
That a recession has arrived is not a new position for Booth, who has long been pointing at downward-revised labor figures to push against soft landing talk.
Booth supports this using an indicator developed by Goldman Sachs. It says that when the unemployment rate’s three-month average moves up 0.3 percentage points from its 12-month low, it historically indicates a recession.
By that standard, the rule was triggered in October of last year, according to recently published labor revisions through the third quarter of 2023, indicating job losses of 192,000.
“These revisions, they keep pushing us back further and further from where we thought we were,” Booth told Fox Business late last month.
And fresh data only points to a worsening labor environment, she now added.
April’s job report delivered fresh weakness to markets, with the number of nonfarm payrolls added coming in significantly below estimates. Unemployment also ticked up slightly month-to-month, rising to 3.9%.
“There were 115,000 [job losses] in the month of April, which was seasonally higher than that of January and again, we’re about 22,000 with just a hop skip and a jump four days into May of data, so we’re definitely seeing an acceleration of job cut announcements,” she said.
Other analysts have also projected rising recession risk, hand-in-hand with a labor market fallout. For instance, a hard landing could hit at the end of this year and send unemployment surging to 5%, economist David Rosenberg has said.
With the ramp up in layoffs, Booth also noted that offered severance will drop to 60 to 90 days, as opposed to the six to nine-month packages offered in 2023.