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- The US may already be in a recession, according to Danielle DiMartino Booth.
- A steady rise in the unemployment rate above cycle lows signals a recession, she said.
- Other forecasters have said the unemployment rate could reach 5% by year-end.
The US could see a rise in layoffs, and there's one indicator in the labor market that suggests a recession is already here, according to veteran market forecaster Danielle DiMartino Booth.
The Quill Intelligence Research chief strategist pointed to worrying signs in the labor market, despite headline job growth remaining strong. The economy added 303,000 workers in March — but the jobless rate has steadily ticked higher, rising from a low of 3.4% in April 2023 to around 3.8% last month.
As of February, the labor market has been pointing to a historical recession indicator that flashes when the unemployment rate rises 0.35% above its cycle low and holds above that level for at least three months. That was the case for the 2008 recession, Booth noted, with the National Bureau of Economic Research dating the recession back to the month the indicator was first triggered.
"So we're in a recession, as far as the unemployment rate is concerned," Booth said, speaking in an interview on The David Lin Report last week.
Job cuts have climbed this year. Total layoffs and discharges rose nearly 10% year-over-year in February, according to Federal Reserve data — and worker firings could accelerate in the coming months, Booth predicted, given that layoffs typically surge as firms report earnings.
She estimated that layoffs for the year could rise to 370,000 by the end of April. That would be the highest number of layoffs recorded over the first four months of the year since 2009, in the wake of the Great Financial Crisis, she said.
Booth has been warning for months of a coming wave of job losses. Top economist David Rosenberg has also predicted that the unemployment rate could rise to around 5% by the end of the year as a recession hits the economy.