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Recession still more likely than soft landing

The apparent resilience of employment in December has boosted hopes that the US can avoid a recession, but we still think that is unlikely. Employment is a coincident indicator whereas the only genuine leading indicators in the employment report – temporary help employment and hours worked – both point to an imminent recession. In addition, the declines in the latest ISM indices means that nearly all the forward-looking activity surveys are now at recessionary levels too.

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