Advisor Flipbooks

2024 SEI ® Data as of 12/31/2023 unless otherwise indicated. 4 Exhibit 4: China bear Source: Citigroup, MSCI, SEI. Shifting back to the U.S. economy, we expect more subdued growth in 2024, perhaps deteriorating into a stagnant/mildly recessionary environment along the lines of what is currently being seen in much of Europe. While interest rates may no longer be rising, they remain high and are starting to bite harder. Households have smaller savings cushions to draw upon to sustain spending in excess of their incomes. Credit-card usage is up sharply and, as a result, delinquency rates are climbing. The situation is not yet critical or indicative of recession, but households will be more heavily reliant on a continued robust jobs market and strong wage growth in the months ahead. The good news is that the jobs market is still tight. However, there are signs of weakness cropping up. The Job Openings and Labor Turnover Survey (JOLTS) report highlights the deterioration. Exhibit 5 compares the number of job openings to the number of officially unemployed persons, discouraged workers (unemployed and not looking for a job, yet claiming to want one) and employees in temporary and part-time positions who want to work full time. Job openings have been decreasing since March 2022, from a high of 12 million to a current reading of 8.7 million as of October. That is a fairly hefty pullback at a time when the economy is still growing at a decent pace. Perhaps many of these job openings were "phantom" in the sense that employers were merely testing the waters to see who was available and qualified, but had little intention of filling the positions in the near term. In any case, the number of job openings is still well above the pre-COVID peak achieved five years ago. The number of unemployed and underemployed persons, meanwhile, has begun to creep up noticeably, totaling 11.8 million as of November, according to the U.S. Bureau of Labor Statistics. Exhibit 5: The jobs market is still tight, but less so Source: U.S. Bureau of Labor Statistics, SEI. -150 -100 -50 0 50 100 150 200 80 85 90 95 100 105 110 115 120 Jan 23 Feb 23 Mar 23 Apr 23 May 23 Jun 23 Jul 23 Aug 23 Sep 23 Oct 23 Nov 23 Dec 23 Index Rebased Index, 1/1/2023 = 100 MSCI China Index (total return) vs. China Economic Surprise Index MSCI China Index (total return) (LHS) China Economic Surprise Index 0 10 20 30 40 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Millions of persons Job openings vs. unemployed and underemployed U.S. Recession Periods Job Openings Officially Unemployed, Marginally Attached and Part-Time for Economic Reasons 23 million-person gap

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