-
The US economy is headed for a recession in the middle of 2024, Citi’s chief US economist said.
-
The economic data seems strong but is hinting at signs of a decline, as seen in the latest jobs report.
-
Credit-card delinquency rates are also on the rise, and retail sales data has shown a drop in activity.
The soft-landing dream is over; instead, the US economy is headed for a recession in the middle of 2024, Citi says.
“There’s this very powerful and seductive narrative around a soft landing, and we’re just not seeing it in the data,” Citi’s chief US economist, Andrew Hollenhorst, said in a CNBC interview.
On the surface, the data looks great: The economy is benefiting from historically low unemployment, strong consumer spending, and robust GDP growth.
But there’s more going on with the numbers than meets the eye.
“The question is where are these forward-looking indicators showing us that we’re going to go,” Hollenhorst said.
One place the economy is showing a weakness is the labor market. January had a blowout jobs report, adding 353,000 jobs to the economy. But Hollenhorst noted that if you scratch beneath the surface, the number of hours worked is falling, the number of full-time workers has decreased, and sectors such as the restaurant industry have stalled on hiring.
“That’s the key to the economy — what happens in the labor market,” Hollenhorst said. “If the unemployment rate stays low, people continue to spend, the economy…
