November 7, 2023
Well, it is settled. There will not be a recession in 2023 despite the fact that just about every market analyst was predicting one to start this year. This does not mean that a recession won’t hit in 2024. As a matter of fact, we are convinced that a recession is more likely now that more analysts are not predicting one. You can tell what we think of economic forecasters. Why did we not have a recession in 2023, despite the Federal Reserve jacking up interest rates to levels not seen for many years? One word – jobs.
We have made this statement again and again. You can’t have a recession in an economy that is producing millions of jobs each year. People who have jobs spend money. September was a perfect example of this indicator. The economy produces about a third of a million jobs. And retail sales beat expectations. This capped off a quarter that had a growth rate of close to 5.0%. That was not a coincidence. Again, we are not predicting the future, but if the jobs machine keeps humming, we are expecting no recession and the Federal Reserve to have plenty of fodder to keep interest rates higher for longer as a result. Thus, the question is – will the job market slow down so we can give the Fed some breathing room.
How did the jobs machine do in October? The economy produced 150,000 jobs last month, less than expected, but still a solid number. In addition, the previous two months of job gains were revised downward by 101,000 jobs, which took some steam out of previous data. The unemployment rate rose to 3.9%. Overall, that was a moderate report, finally showing some easing of the hot jobs machine. While the Fed met last week, they may not have raised rates, but they were watching this report closely to see what they should do before the end of the year and beyond. Especially important to them was wage growth, which came in 0.2% monthly, lower than expected — though annual gains still hovered around 4.0%. All in all, good news for interest rates in the short-term and long-run.
Source: Origination Pro
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Executive Vice President, Benny Loria
Benny Loria, Esq. 718-943-9200 Ext. 115
Benny Loria is a co-founder of AMERIMUTUAL Mortgage and Executive Vice President. Like his brother Philip, Benny is also an attorney and has extensive knowledge of New York’s real estate market.
Benny is responsible for managing the firm’s commercial and residential sectors. Over his career, Benny has developed deep and lasting relationships with a broad array of lenders, which in turn leads to an extensive array of mortgage products for his clients.
Benny is responsible for day-to-day management of the firm’s relationships with its most active lenders and management of AMERIMUTUAL’S Loan officers and Processors