The latest jobs report shows that the U.S. labor market is in decent shape, but Bank of America sees trouble looming in the distance.
In December 2022, total nonfarm payroll employment rose by 223,000, beating economists’ expectation of a 200,000 increase. It also means that America’s job growth is heading in the right direction.
Bank of America, however, expects nonfarm payroll gains to turn negative this year. During the first quarter of 2023, the bank projects that the U.S. will be losing roughly 175,000 jobs a month.
And it’s not just the labor market that’s going to take a hit.
“We are looking for a recession to begin in the first half of next year,” Bank of America’s head of U.S. economics Michael Gapen told CNN last October.
“The premise is a harder landing rather than a softer one.”
Let’s take a look behind the bearishness.