By coinnews 
00:00 Speaker A
The US economy has defied a recession, so far. Some economists do think that could change. Yahoo Finance’s Alexandra Canal joins us now with more. Allie, we’ve almost become conditioned over the past couple of years to predictions of an economic slowdown that haven’t quite materialized.
00:18 Alexandra Canal
Yeah, if you look at 2022, 2023, post-COVID pandemic, all economists out there were screaming from the rooftops that we were going to enter a recession, especially since the Fed was tightening with aggressively high interest rates. That ultimately did not happen. So I’m curious whether or not we could see that materialize this time around. And talking to a lot of these economists out there, yes, recession odds have increased, but it’s not necessarily fully baked into their base case yet, because there’s all this uncertainty surrounding tariffs. And any quick u-turn from the administration, that’s going to drastically change the outlook. So I wanted to focus in on the labor market specifically. And when we look at that, economists have told me that businesses are actually quite confident that the administration is going to really not commit as aggressively as they have promised on some of these reciprocal tariffs. Now, the one thing that businesses have learned from past recessions is that once you commit to aggressive layoffs, it’s very difficult to reverse those. So they’re trying not to make any sudden moves until they have some more clarity on that front. Now, when I talk about the timeline of that, it’s not the next few months, it’s not around liberation day. It’s really the next few weeks. That’s when they need to start to see some clarity. Now, regardless of that, if they start to see sales getting hit, obviously that’s going to lead to some weakness in the labor market. If we think about different indicators that are out there, Brian Deidrick was just talking about jobless claims. That’s held up. We are still below 300,000. We have seen hiring freezes, particularly when we think about sectors like travel, but really, it’s the real-time corporate commentary on these earnings calls that economists are really zoning in on because when it comes to the labor market, there’s really not a perfect indicator, right? A lot of things are lagged. And when you think about things like jobless claims, if you’re laid off from a big corporation, you’re probably getting severance. We’re in a tight labor market, you’re probably putting your energy into finding jobs. Maybe you’re not filing for those unemployment benefits. So sometimes it doesn’t tell the full picture there. So really, when we look ahead, recessions can happen fast. If we get a negative non-farm payroll print, we’re probably already behind the eight ball, but there’s not much out there that we can look to to really give us a full picture of things. So it’s sort of just grasping at all these anecdotal stories and trying to really pay attention to what corporations are telling us.
04:28 Speaker A
When you spoke to these economists, Allie, were there certain specific metrics that they were focused on the most, concentrating on the most right now?
04:37 Alexandra Canal
They said jobless claims are probably your best bet. But again, even look what’s going on with all the Dodge layoffs, right? Things in DC, that has been all over the place because we have severance packages, and we have these corporate buyouts and things like that. So we’re not totally getting the full picture, and we’ll probably see more over the coming months, maybe in the second quarter. That’s really the timeline here. Towards the end of Q2 is when we could see potentially some weakness, but in terms of indicators, look at those earnings calls, really see what management is saying, if they’re finding any evidence of layoffs or if they’re exploring that. If they are freezing hiring, that in aggregate is going to give you more of a better picture than some of these indicators. You know, we have ADP coming up. A lot of chatter about the Challenger data. That’s a lot of noise right now, and it seems like these economists are not so much focused on those types of surveys.
05:53 Speaker A
Interesting. Thanks so much, Allie. Appreciate it.