ILCB - Why We Won't See A Recession In 2024

2024-04-11 06:50:00 ET

Summary

• The jobs market is unlikely to lead to a recession in 2024.
• Wage growth continues to trend lower, while a spike in unemployment that would trigger a recession appears unlikely from here.
• In fact, the leading indicators of employment growth suggest we are close to a bottom, and employment growth should start to pick up as we progress through 2024.
• How much further wage growth can fall from here remains to be seen, but it seems unlikely, we return to pre-COVID levels.
• As it stands, the labour market is one that doesn’t warrant rate cuts, nor is it one that requires rate hikes.

Don’t expect unemployment to lead to recession

The debate between a hard landing and a soft landing has been raging for some time now. To me, the outcome is likely to be determined by the labour market. And, while the jobs market is clearly not as tight as it was 12 months ago (evidenced by the steady decline in wages of late), there are plenty of signals suggesting we won’t see a material rise in unemployment that would equate to a hard landing and recession....

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