Americans are about to start losing their jobs — and that will spoil the Fed’s dream no-recession scenario, Vanguard top economist says – By George Glover (Business Insider) / July 31, 2023
- The Federal Reserve said last week that it no longer expects a recession in the US.
- But Vanguard’s top economist, Joe Davis, said unemployment will spike above 4% over the next year.
- “By that metric, it actually is a recession — because you have very modest job losses,” he said.
Americans will start losing their jobs soon — and that will probably stop the Federal Reserve from achieving its dream no-recession scenario, Vanguard’s top economist, Joe Davis, said.
Most banks expect unemployment to spike above 4% in the next 12 months as the central bank’s aggressive interest-rate hikes filter into the labor market.
Davis told Bloomberg’s “What Goes Up” podcast that while those job losses are set to suppress wage growth and help inflation fall to the Fed’s target level of 2%, they could also scupper its hopes for a so-called “soft landing” — when soaring prices cool but there’s no recession in the US.
