The U.S. economy will not be having a soft landing and instead is heading for a recession in 2024, according to Citi’s chief economist, Andrew Hollenhorst.
What Happened: Hollenhorst expressed his concerns about the impending economic downturn in an interview with CNBC and indicated underlying factors suggesting trouble ahead, reported Business Insider on Friday.
“There’s this very powerful and seductive narrative around a soft landing and we’re just not seeing it in the data,” Hollenhorst said.
One key area of concern is the labor market. Despite a strong January jobs report, the number of hours worked and full-time workers has decreased. Sectors like the restaurant industry have also seen a stall in hiring, indicating potential economic weaknesses.
Hollenhorst also highlighted the persistently high inflation and rising credit card delinquency rates as other warning signs. The recent CPI data, which showed a higher-than-expected monthly inflation increase, has also negatively impacted the stock market.
See Also: Japan No Longer World’s Third Largest Economy As Aging Asian Powerhouse Concedes Position To Germany
Why It Matters: This isn’t the first time experts have shared their concerns about the U.S. economy. Sentiments are echoed by Apollo Management’s Torsten Sløk, who recently stated that a soft landing is now the “least likely” scenario. Sløk expressed his doubts about a soft landing, stating that it was “almost the most unlikely scenario.” His shift in perspective was attributed to ongoing economic data, including the easing of financial conditions.
Similarly, former Home Depot Inc. CEO Bob Nardelli warned of a significant shift in the labor market and predicted no soft landing for the U.S. economy. He highlighted the impact of rising inflation and the possibility of widespread layoffs across various sectors.
Despite these warnings, some experts remain optimistic. For example, BlackRock Inc.’s Rick Rieder believes that the U.S. economy is in good shape and has reached a new normal state after several years of abnormalities following the COVID-19 pandemic and military conflict in Europe.
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