Danielle DiMartino Booth, CEO of QI Research, has warned that the US economy may already be in a recession. According to Booth, key indicators such as rising job losses and downside labor revisions suggest that a recession was triggered in October 2023. She has been skeptical of soft landing talk and used indicators developed by Goldman Sachs to support her argument.
Recent data has added to the bleak picture of the labor market, with April’s job report delivering fresh weaknesses. Nonfarm payrolls added significantly below estimates, and unemployment ticked up slightly to 3.9%. Booth noted an acceleration of job cut announcements, with analysts projecting rising recession risk and a potential hard landing by the end of the year.
Booth also highlighted changes in severance packages, noting a drop from six to nine-month packages offered in 2023 to 60 to 90 days currently. With job losses on the rise and recession risks looming, the US economy faces challenges that could further impact the labor market.