While most economic prognosticators are steadfast in their belief that the employment statistics produced by the BLS show a strong labor market (they don’t), the alchemists at Bank of America are anticipating that this will soon not be the case.
As pressure from the Fed’s war on inflation builds, nonfarm payrolls will begin shrinking early next year, translating to a loss of about 175,000 jobs a month during the first quarter, the bank said. Charts published by Bank of America suggest job losses will continue through much of 2023.
While the BLS employment stats do not portray a “strong” jobs market in the US, they also show that the much anticipated shedding of jobs has yet to occur at significant levels.
The universal trend in nature is towards equilibrium. Where there is disequilibrium, correction soon follows. To the degree that jobs markets and the overall economy are in disequilibrium, a correction is inevitable, and likely sooner rather than later. However, when that correction occurs or what shape it will take are questions as yet unanswered.
BofA Predicts Collapse In Labor Markets Next Year
BofA Predicts Collapse In Labor Markets Next Year
BofA Predicts Collapse In Labor Markets Next Year
While most economic prognosticators are steadfast in their belief that the employment statistics produced by the BLS show a strong labor market (they don’t), the alchemists at Bank of America are anticipating that this will soon not be the case.
Expecting that Fed Chair Jay Powell’s fetish for interest rate rises will eventually choke off labor demand (actual demand as shown by actual hiring, not the fantasy of “job openings”), BofA predicts the economy will begin shedding tens of thousands of jobs per month beginning next year.
Of course, we must not forget that there have been signs of impending job losses for some months now.
While the BLS employment stats do not portray a “strong” jobs market in the US, they also show that the much anticipated shedding of jobs has yet to occur at significant levels.
The universal trend in nature is towards equilibrium. Where there is disequilibrium, correction soon follows. To the degree that jobs markets and the overall economy are in disequilibrium, a correction is inevitable, and likely sooner rather than later. However, when that correction occurs or what shape it will take are questions as yet unanswered.
Interesting times are coming….