I am entertaining the notion of a “Job Gain Recession“.
A chart of year-over-year nonfarm employment shows that’s nearly what happened in the 1970 and 1980 recessions.
Nonfarm Payroll Job Losses
Jobs a are a horribly lagging indicator. Recessions invariably start with the economy adding jobs as noted by the red squares in the above chart.
Job losses in recessions vary widely. At the deepest point of the 1980 recession, the maximum year-over-year loss in nonfarm jobs was only 378,000. In contrast, the economy shed 6.8 million jobs in the 2007-2009 “great recession”.
The peak of the job losses in most recessions is after the recession is over.
What Would a Job Gain Recession look like?
Serious Risk of Major Currency War
The Fed not hiking as much as expected would pressure the US dollar, at least in isolation. But the ECB, Bank of Japan, and Bank of China do not want to see their currencies rise.
The other central banks would likely counter with beggar-thy-neighbor devaluation tactics to weaken their currencies. And the risk of an all-out currency war of some kind would certainly come into play.
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