I'm Coy Wells for U.S. Money Reserve. Recent data released by both government agencies and private companies may be pointing to a contraction in the U.S. economy. On June 4th, 2024, the Bureau of Labor Statistics reported that the number of job openings fell to a three year low in April 2024. Payroll firm ADP released similar data the following day, saying that hiring slowed down in June while wage growth has remained stagnant.
Outside of the labor market, the country's economic productivity in the first quarter of 2024, as measured by the gross domestic product, or GDP, was revised downward from a pace of 1.6 to 1.3%. In contrast, the GDP of the third quarter of 2023 was 3.4%. The Wall Street Journal further reports that measures of regional productivity also show signs of a constricting economy. For example, the journal points to the Chicago Business Barometer, a measure of business activity in the Chicago area which fell from 37.9% in April 2024 to 35.4% in May.
What do these numbers mean to the overall economy? While alone, these data points could be considered outliers, together, they paint a picture of an economy that is becoming less and less productive. Economist Mohamed El-Erian, president of Queens College at Cambridge University, said in a recent appearance on Fox business that this data represents an economy under pressure from the Federal Reserve's restrictive policies and that our economy is at risk of entering a recession. But the Federal Reserve might be willing to risk a recession to slow the pace of inflation, as indicated by Minneapolis Federal Reserve President Neel Kashkari and public comments he made on June 3rd.
If these numbers continue to point toward a recession or market correction, assets and consumer portfolios such as equities may be at risk. One conservative safe haven asset used by consumers and institutions during times of uncertainty is gold. Gold has commonly been used as a hedge against economic turmoil for generations, and even rose to a record high in the aftermath of both the 2008 and 2020 economic recessions.
To learn more about the benefits of owning physical gold at home, or as part of your gold backed IRA, and to receive your free gold information, could call U.S. Money Reserve and speak to one of our dedicated account executives today.
