But as data continues to come out in the months ahead, Edwards says to pay attention to details beneath the headline numbers.
The number of jobs added in February was revised down from 326,000 to 248,000, and March's number was revised down from 236,000 to 165,000. March's gains were the smallest seen since December 2020, when the economy shed jobs, and were well below the 290,000 average over the last six months. Given his outlook that a recession is already underway, Edwards is bearish on corporate profit performance going forward, saying it has a"very, very long way to fall.
"Investors are cheering 'greedflation' at the micro company levels as profits do ok, but the macro implications for inflation and interest rates mean a deeper recession for longer," he wrote in an email to Insider."I think the recession will lead to a collapse in margins and profits and do a lot of damage."
Wilson sees the S&P 500 falling to somewhere between 3,000-3,300 in the months ahead before recovering to 3,900 by the end of the year. As the index currently sits around 4,135, a drop to 3,000 would represent 27% downside. In terms of his view on the labor market, Edwards has company in Ian Shepherdson, the chief economist at Pantheon Macroeconomics. He told Insider this week that the labor market would likely fall apart more quickly than investors realize, and that the lag effect of rate hikes and the credit crunch that ramped up in recent weeks means a recession is on our doorstep.