Despite concerns over a potential economic slowdown, the US economy has added over 1 million jobs this year, prompting some analysts to downplay the possibility of a recession. However, the latest jobs data released by the Bureau of Labor Statistics shows a slowdown in job growth, adding 236,000 jobs in March, the weakest gain in the post-pandemic period, and a dip in the unemployment rate from 3.6% to 3.5%. While some economists see this as evidence that the US is not heading for a recession, others are cautious about the potential impact of the recent collapse of Silicon Valley Bank.
Pantheon Macroeconomics chief economist Ian Shepherdson has warned that the tightening of credit and financial conditions resulting from the bank’s collapse could lead to a lower or even declining mode of growth. He cites the uptick in jobless claims and a drop in hiring intentions among small businesses as indicators that job gains could turn negative by the summer. On the other hand, Michael Antonelli, managing director and market strategist at Baird financial services group, believes that the US economy is still in good shape and that the recent job growth figures are not consistent with a recession.
In addition, there are positive signs for the housing market, which has experienced a rebound in home prices after a long slump triggered by rising mortgage rates. Despite these positive developments, mixed signals from the labor market and conflicting expert opinions are leaving the markets unsure of where to go next. Economic confidence has been drifting mostly sideways since the fall, according to a recent Gallup poll, suggesting that the US economy is holding up despite signs of a slowdown.
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On the date of publication, Gregory Timmons did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer/contributor.