These include the Economic Cycle Research Institute Weekly Leading Index and the Conference Board's Leading Economic Index. Job openings are also starting to fall, despite remaining historically robust, and companies are starting to mention layoffs more frequently in quarterly earnings calls.īroad economic gauges are also showing a slowdown ahead. Unemployment ticked up to 3.7% in August from 3.5% in July, despite the US adding over 300,000 jobs during the month. The labor market is also showing initial signs of weakness. Mortgage applications are way down, prices are beginning to fall in some cities and seem primed to fall on average nationwide in August, and homebuilder sentiment is falling off a cliff. In addition to equity markets, the housing market is rolling over significantly. CPI, a primary measure of inflation, is currently at a 40-year high of 8.5%. Since August, 16, however, the index is down 5.3% as investors continue to absorb recent hawkish comments from Fed Chair Jerome Powell, who has said the Fed will remain hawkish until inflation is down significantly. The S&P 500 has fallen as much as 24% since January, but recovered much of the losses between mid-June and mid-August, partly because investors had been anticipating more dovish policy from the Fed in 2023. Stocks are in a bear market, a signal that investors are anticipating hardship ahead. Lending standards are also tightening, a sign that banks are more hesitant to lend money. The yields have inverted before every recession since the 1950s. Yields on 2-year Treasury notes are higher than those on 10-year Treasury notes, a tell-tale sign that the US economy is in near-term trouble. Then there's the ongoing yield curve inversion in the US Treasury market. This is likely to cause a sharp contraction in economic growth, he said, just like increasing money supply since early 2020 fueled the economic boom as the US recovered from the economic effects of COVID-19 and its related restrictions. Wolfenbarger, the founder of and a former Allianz Global Investors securities analyst who started his career 30 years ago, laid out in a recent commentary 10 reasons he sees a recession ahead, likely starting in early 2023.įor starters, the money supply is shrinking as the Federal Reserve tightens policy by reducing the number of assets it holds. Yet, so many in the market don't seem to be able to see it, he laments. He told Insider on Friday that stocks also have major downside as the Fed tightens.įor Jon Wolfenbarger, the writing is on the wall that a recession is coming in the US.The founder of recently laid out 10 reasons a downturn is coming.

A recession awaits the US economy, says Jon Wolfenbarger.A trader works on the floor of the New York Stock Exchange, October 17, 2008.

Linkedin stock crash