June 27, 2023
Just about every market analyst has been predicting a recession sometime in 2023. Well, here we are ending the first half of the year and we have seen very few signs of a recession. To the contrary, as of last month the economy had added almost 1.5 million jobs in the first five months of the year – on pace for 3.5 million jobs for the year. And job openings are currently hovering around 10 million. That is a lot of jobs to fill.
As the solid economic news has continued to roll in, the market analysts have pushed the recession forecast down the road a bit and have added the phrase “mild recession” to their analyses. Even we have made the statement that job growth cannot continue at this pace, because the unemployment rate is so low. This is not really much of a projection, just logical thinking in this regard.
But we also would remind you of another statement we made months ago – you can’t have a recession if the economy is adding hundreds of thousands of jobs each month. The economy can slow down—but people who are employed spend money and consumers continue to spend in this environment. So, will a recession finally arrive? We don’t know the answer to that question, but certainly employment growth must slow down in order for a recession to take hold. Certainly, the Fed must be confounded by the fact that they have raised rates again and again, but the economy keeps producing jobs. So, employers of the country – keep hiring and stick your tongue out at the Fed!
Source: Origination Pro