Famed economist who predicted 2008 recession warns Feds of huge 'shock' coming ... trends now
An economic consultant who accurately called the 2008 recession has again claimed he is skeptical of the US economy.
David Rosenberg, the founder of Rosenberg Research, made the declaration Friday, hours after April's jobs report fell short of expectations.
The US economy added 175,000 jobs last month, shy of economists' forecasts for 238,000. In notes to clients Friday, the former Merrill Lynch chief economist explained why he views the numbers as a cause for concern.
Well below the 274,000 average jobs added per month from December to March, he said, the data is inconsistent with numbers coming from the BLS' Quarterly Census of Employment and Wages and Business Employment Dynamics datasets, both of which had a much softer job growth for Q3.
Given the disparity, Rosenberg said the data is likely 'overstated - by historical proportions'.
An economic consultant who accurately called the 2008 recession has again claimed he is skeptical of the US economy
David Rosenberg, the founder of Rosenberg Research, made the declaration Friday, hours after April's jobs report fell short of expectations. He worked as Merrill Lynch's chief economic consultant when he accurately forecast the most recent recession
'The revisions will not be coming for another six months and when they do get released, it will come as a shock to the Fed - and to the markets as well,' Rosenberg said of the downward revisions he believes are still to come in the months ahead.
'The Fed now intends to stay on the sidelines as it closely watches lagging and contemporaneous indicators that are littered with high error terms,' he added.
'And the longer it waits, the more it is going to have to do on the rates front.
'Shades of 1991, 2001 and 2008 [all over again.]'
In addition to believing the jobs data is distorted, Rosenberg further claimed that stock prices and valuations that have rose in recent month are also disconnected from reality.
Aired in another note to clients penned April 23, that warning claimed the burgeoning bubble created by booming AI stocks could be about to burst - with the financier pointing to dips seen from AI proponents like Nvidia days before as proof.
"The market action last week was part and parcel of the air being let out of the AI balloon, with Nvidia experiencing its worst single-day drop since March 2020,' he explained, citing statistics that show how AI stocks have sputtered after climbing several hundred percent since 2022.
'The intense AI-fueled momentum to the upside is now heading in reverse,' he said.
In addition to believing the jobs data is distorted, Rosenberg further claimed that stock prices and valuations that have rose in recent month are also disconnected from reality. Pictured, the inside of the New York Stock Exchange on Friday
Aired in another note to clients penned April 23, that warning claimed the burgeoning bubble created by booming AI stocks could be about to burst - with the financier pointing to dips seen from AI proponents like Nvidia days before as proof
As of writing, Nvidia's stock has since made a slight recovery, about 60 dollars shy of its peak this past March.
As for the inconsistencies between the BLS's datasets, he blamed the method the bureau uses to collect the data - citing how the BLS surveys a sample of businesses to produce its monthly reports.
