Next US recession may be pushed back to 2025, according to JPMorgan (2024)

US recession may have just been delayed to 2025, as per a recent note from JPMorgan's trading desk that highlighted the strength seen in ISM manufacturing activity in March that jumped over 50 for the first time since September 2022 which represents an expansion in manufacturing activity. The data ended a 16-month decline in US factory activity amid a solid demand for goods which led to a sharp rebound.

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What note said on US recession?

JPMorgan's Ellen Wang and Andrew Tyler of the Market Intelligence team said the reading "contributes additional evidence on the global recovery in manufacturing."

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Will there be a recession in US soon?

The economic data should “give more confidence that the US economy is recovering in additional sectors and recession fears for 2024 are likely to be pushed into 2025”, it noted. This means that if there was a potential recession it is pushed back to 2025 because of the solid manufacturing data.

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Why US recession could be in 2025?

The note said, “This is not an issue for stocks where we continue to see Size/Quality types of names dominating sector performance as these companies continue to print strong earnings numbers in an elevated rates environment and did this in 2023 when much of the world was materially weaker than they are today.”

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Solid labor supply should help mute wage inflation, which represents a major component of overall inflation, the note added. This comes after Fed's GDPNow estimate of 2.8% economic growth in the first quarter, elevated job openings, and low unemployment claims.