Financial analyst Gary Shilling, renowned for accurately predicting the 2007-2008 financial crisis and its roots in the subprime mortgage loan market collapse, says the U.S. economy still faces the potential of a deferred recession. Evidence indicating the U.S. labor market may be cooling is at the core of his concern.
According to Shilling, the labor market’s accelerated bounce-back post-pandemic allowed the U.S. to largely avoid a potential recession last year, however, the economic pain may have just been delayed.
“You haven’t had that weakness in labor markets that, I think, you normally would have had and would have [caused] a recession [in 2023],” Shilling said in an interview with CNBC. He added: “That doesn’t mean we won’t have one, but it means whatever it is, it’s delayed.”
Shilling warned that he’s already seeing “preliminary signs of weakness” in the labor market, suggesting a recession-inducing slowdown could be imminent. The financial analyst is especially concerned about indicators showing a decrease in wage gains, rising rates of quits, and service inflation.
