Michael Darda, chief economist and macro strategist at Roth MKM, joins ‘The Exchange’ to discuss near term indicators of recession, timing a recession through jobless claims numbers, and staying defensive with sectors like healthcare. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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Continuing claims up 22% is unprecedented outside of a recession, says Roth MKM’s Michael Darda
The economic impact of the COVID-19 pandemic has been unprecedented in many ways. From the closure of businesses and skyrocketing unemployment rates to the stock market volatility and government stimulus packages, the world has been grappling with an economic crisis on a global scale.
One of the indicators of the economic fallout from the pandemic is the number of continuing jobless claims. These claims represent individuals who have filed for unemployment benefits and are still unemployed and actively seeking work. According to Michael Darda, chief economist and market strategist at Roth MKM, the increase of 22% in continuing claims is unprecedented outside of a recession.
Typically, during an economic downturn or recession, the number of continuing claims rises as businesses lay off workers and job opportunities become scarce. However, outside of these periods, such a significant increase in continuing claims is rare. It underscores the severity of the current economic crisis and the challenges faced by individuals in finding new employment.
The situation is a reflection of the economic devastation caused by the pandemic and related lockdown measures. Businesses across various industries, from retail and hospitality to manufacturing and transportation, have been severely impacted, leading to widespread job losses. Even as some countries started to ease restrictions and reopen their economies, many businesses have struggled to recover and rehire workers due to reduced consumer demand and ongoing uncertainties.
Government support in the form of stimulus packages and unemployment benefits has played a crucial role in assisting individuals affected by the economic downturn. However, as the crisis persists, the strain on government resources and the effectiveness of these measures come into question. There is growing concern about the long-term impact on the labor market and the ability of individuals to find new employment once the pandemic subsides.
The unprecedented nature of the increase in continuing claims outside of a recession highlights the need for a coordinated effort from governments, businesses, and individuals to navigate the economic challenges ahead. Governments must continue to provide support to affected individuals and businesses, while also implementing strategies to stimulate economic growth and job creation. Businesses need to adapt to the changing market dynamics and invest in innovation and digitalization to remain resilient. Additionally, individuals will need to enhance their skills and embrace new opportunities in emerging sectors.
The road to recovery will undoubtedly be challenging, but with concerted efforts and a resilient spirit, economies can gradually rebuild and overcome the long-lasting impact of the pandemic. It is crucial for all stakeholders to work collaboratively and proactively to ensure a more inclusive and sustainable future for the labor market.
Recessions are an unavoidable part of the economic cycle; all you can do is prepare for them and plan accordingly. I graduated into a slump (2009). My first job after graduating from college was as an aerial acrobat on cruise ships. Today, I work as a VP for a global corporation, own three rental properties, invest in stocks and businesses, run my own company, and have increased my net worth by $500k in the last four years.
this guys eyebrows are way too distracting. also, yeah the % increase doesn't matter, it's all about the absolute level of claims.
Everyone's preaching doom, without any key data-trajectory on how to maneuver, it's obvious stocks are unstable but folks are still pulling off huge 6 figure profits from this same market y'all are warning us about, videos on such strategies to maneuver will really be helpful, thank you.
Just like in 2008-9 the GOV will go back and claim we entered a recession after the fact. We're obviously in recession. We already had two negative growth quarters and if inflation was accurately reported the deflator would have proven that for the whole year and even back through 2021. Only in DC, where money flows like a river to GOV employees (The supposed "Servants" of the public), is where they'll avoid economic hardship. People are tapped out with max debt. We're in more trouble than 08-9.
According to some experts, the United States and other regions of Europe may have a recession in 2023. Because China and emerging countries frequently grow faster than more developed economies, a global recession, which is defined as a decline in annual global per capita GDP, is more uncommon. Fundamentally, if economic growth lags behind population growth, the global economy is said to be in a recession.
Its priced in already, stock market is ahead by 6 months
When he says defensively I think who is playing aggressive right now 5 percent yields in the 3 month. No risk
From my perspective, this highlights the importance of having a competitive advantage as investors. Merely mirroring the market strategies of others is insufficient in achieving optimal results. I am currently grappling with the decision to invest in the current market, as it presents both uncertainty and opportunity. Could you share your insights on this matter?
..Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals. you have to contend with inflation, recession, decisions from the Feds and all. I was able to increase my portfolio by $289k in months. You have to seek for help in the right places
investing is a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labor in the future. Invest wisely.
Success depends on the actions or steps you take to achieve it. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments.
Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future..,My 2 cents -get an advisor to keep you accountable and aid you make better decisions, Gregory Thomas Patchak has been helping me a lot, all through my journey. I find it better to pay a little bit more for peace of mind than worry about money or market trends and still get burned..
Nice bathroom.
IS HE IN HIS BATHROOM? that's a sign of recession
I'm in supply chain management. Just 6 months ago, we were having difficulty hiring for a manager position. We re-posted the same job last week and currently have 74 (and counting) well qualified candidates.
Basing your recession predictions on a single data point is ineffectual and overly simplistic. Michael Darda should be ashamed for using his title to spread such low quality predictions
Didn’t realize Owen Wilson was a financial advisor
Bullish news all around. Only a matter of time before the FED pause and pivot to more money printing. LOTS more.
With changes in the economy leading to instability in the stock market, some individuals may face a decrease in their investments in an effort to benefit from the current market conditions, I am considering liquidating my $725k portfolio consisting of bonds and stocks. Someone else in the same situation? Please tell me in the comments!..
The bottom is in when fear is at its highest. Bear markets statistically last 13 months.
Darda with the happy sleepy dog and Kelly Evans. You can do much worse!
I would argue we’ve already been in a recession for the past few months
CNBC has become a “recession is coming” echo chamber. Continuing claims were at historic lows. Now that they are returning to near pre-pandemic levels (still far below the range of historic levels) the sky is falling? This is may be a good strategy to get clicks but, it doesn’t provide useful information for viewers.
FAKE NEWS
We've been in a recession for quite some time now. Two quarters of consecutive retraction in the economy Is the definition of hitting recession I believe. We certainly have done that. If you're out there looking for it you're in trouble because it's already here.
One biggest indicator you also need to consider… AI taking away jobs. We've never had this in our known existence, at least in the past 3000 years (We don't know verifiably that we didn't reach this same level at the time the pyramids were built, but anyway).
Many indicators are pointing to an imminent recession (or we could be in a recession already).
In 1929, journalist use to propagate and write articles about how great the market was, and specific stocks to help the board's of companies… And they got paid to do so… They spoke and wrote lies, when the stocks were actually worthless… You can see the same thing happening today..
no one is mentioning the one trillion Keynesian injection the US Govt made with the IRA – things are going to take longer
The market doesn't care as long as it's able to get their 0DTE options fix.
Well, we might get some Clarity Friday the 28th with the PCE report. I can see Shiba eating another zero, but only after Shibarium is launched, and we see the steady burn numbers from it.
start shorting now
Its priced in fear mongers