Rick Rieder, global fixed income CIO at BlackRock, says the stronger-than-expected April employment report calls into question the depth of an anticipated US recession. “The backdrop is solid, which questions the deep recession story for sure,” he says on “Bloomberg The Open.”
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BlackRock, the world’s largest asset manager, has raised doubts over predictions of a deep recession following a strong jobs report in the United States. The report, released by the Labor Department, showed a surprise increase in job growth, leading many to question the severity of the economic downturn caused by the COVID-19 pandemic.
The report revealed that the US economy added 2.5 million jobs in May, defying expectations of further losses. The unemployment rate also fell to 13.3%, a significant drop from April’s figure of 14.7%. These results have sparked hopes of a faster economic recovery than previously anticipated.
Rick Rieder, the Chief Investment Officer of Global Fixed Income at BlackRock, has challenged the prevailing narrative of a prolonged and severe recession. Rieder believes that the jobs report indicates an economy that is more resilient than feared and suggests that the worst of the downturn might be over.
In a recent interview, Rieder emphasized the need for cautious optimism and highlighted the importance of understanding the broader context. He noted that while the jobs report was a positive surprise, it should not overshadow the fact that millions of Americans remain unemployed and many businesses continue to face significant challenges.
Rieder’s stance aligns with the sentiment of some other prominent investors and economists who have cautioned against jumping to conclusions based on a single data point. They argue that the labor market can be influenced by temporary factors and that a robust recovery cannot be solely determined by one month’s worth of data.
Despite the encouraging jobs report, concerns about the durability of the economic rebound still persist. BlackRock and other market participants point to the ongoing uncertainties surrounding COVID-19, including the potential for a second wave of infections and the lasting impact on consumer behavior. These factors could pose challenges to a sustained recovery in the coming months.
BlackRock’s skepticism regarding a deep recession reflects a broader debate among economists and market analysts. This debate centers around the possibility of a V-shaped recovery, characterized by a swift rebound, versus a U-shaped recovery, where the economy takes a slower path to recovery. The jobs report has provided support for those arguing in favor of a V-shaped recovery, but many experts and analysts remain cautious given the uncertain environment.
As the global economy slowly emerges from the lockdown measures implemented to combat the pandemic, investors, policymakers, and analysts will continue to monitor economic data closely. The hope is that positive developments, like the surprising jobs report, are sustained and build momentum for a broader, more sustainable recovery.
While BlackRock’s Rieder questions the notion of a deep recession, his skepticism should serve as a reminder that the path to recovery is still uncertain and challenges remain. Prudent analysis and cautious decision-making will be necessary as the global economy navigates through this unprecedented crisis.
These people really think they're going to talk people out of believing that we're going into a recession that we're literally already in. Just stop the markets are done.
Is Rick taking into consideration the vector of job losses that are going to come by way of AI evolving and replacing jobs?
Love reider’s Coke’d up nose sniffles 🙂
How about those REVISED JOB numbers from previous months. What a bunch of lying corrupt politicians….
Something is off with the job market. My guess is vacancies are double and triple posted / advertised, so companies will end up hiring fewer than vacant seats. I also think the quality of some of these jobs is so low and BS that they count as jobs, but people just don’t want them either bc of the low pay or the job is really just a BS job like I don’t know serving coffee in an office as a young grad.
are these numbers being inflated by illegal aliens?
Quick trivia: How many times cyclical was used?
Cyclical meaning cycle like he keep trying to talk in circles to not say anything.
March Jobs creation revision 71k down from 236K to 165K; February jobs revision down 78K from 326k to 248k. Is that solid?
These numbers are as true as CPI numbers have been for the last two years. People on the ground are jobless since the start of this year and your job numbers add hundreds of thousands of jobs every month. That’s a propaganda of elites being pushed by their lapdog media
Tell that to CNBC!!!!!!!!!!!!!!!!!!
I think the fed had sold Bitcoin and possibly started to put that money into the market a little at a time to manipulate as to not make it seem we are going into recession without having to print money
how many of those jobs are held by the people who needs to work multiple jobs just to survive. is that a number for this?
What's the workforce participation rate at? How has that number looked over the past 2 years? I'll give you a hint: not good.