Billionaire bond fund manager Jeffrey Gundlach questions unemployment data: ‘Hard to believe’

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Written by Kristen Altas, Fox Business

As the list of big corporate job cuts looks set to grow in 2024, a billionaire bond fund manager is questioning some of the data.

Jeffrey Gundlach, CEO of DoubleLine Capital, known as the “bond king,” called the state’s unemployment rate “unbelievable” in an interview on “Making Money with Charles Payne.” Ta.

“Amazingly, I think 88% of states have D.C., so there are 51 of them, and 88% of them are reporting an increase in unemployment over the past six months. And this We have a very hard time squaring the circle,” Gundlach told FOX Business host Charles Payne on Thursday.

“If 88% of states are reporting an increase in unemployment, how is it possible that the national unemployment rate is stable at a very low level?” he further argued.

After rising for three straight months, the US unemployment rate unexpectedly fell to 3.7% due to a significant drop in the teen unemployment rate, according to data from the December jobs report.

But the pace of job cuts by U.S. employers will accelerate in 2023, with the number of layoffs jumping 98% from a year ago, according to a recent report from business and management firm Challenger, Gray & Christmas.

Gundlach said states with declining unemployment rates, such as Texas, Pennsylvania, North Dakota and Wyoming, may not be able to offset rising unemployment rates in states such as Florida, Illinois, California and New York. He pointed out that it was expensive.

“I’m skeptical about this data,” the bond king said. “The major economic indicators have been very negative for a long time. The inverted yield curve has been going on for a long time. But what concerns me the most right now on the economic front is the reports from the states.”

He also cited similarities between the current market and the “inflation struggles” of the late 1970s and early 1980s, as well as similar recession concerns.

“The inverted yield curve has been going on for about 80 weeks now, probably a little more than 80 weeks,” Gundlach said. “The only episode in which an inverted yield curve lasted longer before a recession hit was the late 70s and early 80s, which, interestingly, was also the last time the war on inflation occurred.”

“The 10-year Treasury yield was 108 basis points lower than the 2-year Treasury yield. And now it’s 18. Once it starts to turn around, you’re really going to be watching out for a recession,” he added. “And the fact that a recession has not arrived despite over 80 weeks of inverted yields is very flawed logic to say a recession is not coming.”

Gundlach said he expected Federal Reserve Chairman Jerome Powell to cut interest rates as he looks to how markets will play out in 2024.

“It’s all political. I think that’s what’s behind it,” Gundlach said of the Fed’s decision. “fact [that] It’s a presidential election year. But what I’m really thinking about is that the economy is stable for now, but where are real interest rates? Therefore, I think investors should buy 2-year, 3-year, and 5-year government bonds. This is because, although interest rates are not high, they are still higher than the ever-declining inflation rate. ”

FOX Business’ Megan Henney contributed to this report.