Economist Nick Gerli Forecasts Unemployment Spike in Summer 2023 Based on Recession Indicators

Economist and financial analyst Nick Gerli shared his concerns about the US economy in a series of tweets, warning that the Conference Board’s Leading Economic Indicators (LEI) have plunged further into recession territory. He notes that LEI contraction has preceded big layoffs by approximately 12 months in past recessions, suggesting a significant spike in the unemployment rate by summer 2023.

Gerli points out that the LEI has accurately predicted every recession since the 1970s by tracking changes in hours worked, building permits, credit conditions, manufacturing orders, and initial jobless claims. Despite the growing signs of an economic downturn, many experts are forecasting a “no landing” scenario where the US avoids a recession and large job losses.

Gerli argues that this bullish outlook is based on a “this time is different” mentality, which assumes that the unprecedented inflation, interest rates, and debt levels won’t lead to a recession. However, he highlights that in the initial stages of past recessions, such as in 1973, 1980, 1989, 2000, and 2007, similar “soft landing” arguments were made by optimistic experts, only to be proven wrong.

As the US economy faces increasing uncertainty, Gerli’s analysis serves as a reminder to prepare for the potential impact of an economic downturn and to closely monitor the leading indicators that have successfully predicted recessions in the past.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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