In light of the BRICS economic alliance’s recent activities, the United States’ fourth-largest financial institution, Citigroup, has issued a cautionary statement about a potential economic downturn. Citigroup’s lead economist for the United States, Andrew Hollenhorst, has voiced his apprehensions about the nation’s economic stability in a discussion with CNBC.
Hollenhorst raised alarms about the labor market, pointing out that a decline in employment opportunities could spell trouble for the country. He suggested that the nation might be headed towards an unavoidable economic downturn.
Citigroup Issues Economic Downturn Alert
The BRICS economic alliance has seen considerable expansion over the past year, undertaking its first growth efforts since 2001 and adopting economic policies across the alliance. These developments are reducing global dependence on the US dollar and encouraging the use of local currencies.
The strategic moves by the BRICS group could contribute to the warning from America’s fourth-largest bank of a looming economic downturn. Citigroup’s Andrew Hollenhorst predicts a steep decline is probable.
“Companies are slowing down their hiring processes. They’re also reducing the number of hours their employees work,” Hollenhorst explained to CNBC. “This gradual decline is beginning to accelerate, potentially leading to a significant economic setback.”
Hollenhorst also highlighted that certain analyses present an even grimmer outlook on the economic situation. He warned that a recession might follow such a downturn, especially as small businesses show the least interest in hiring since 2016.
Additionally, Hollenhorst mentioned that the current hiring rate is the lowest it’s been since 2014. This, coupled with persistent inflation and interest rate concerns, suggests that optimism may not be warranted.
These issues are compounded by recent doubts about the US dollar’s stability. The BRICS group’s push towards gold and other assets, along with concerns about debt and moves away from dollar reliance, are likely to put further strain on the US economy during this critical period.
Source: Watcher
