Happy Sunday everyone and welcome to our flagship editorial!

I will keep it short and sweet this week on my way to Mallorca!

We have now formalized our recession call for Q1-2024 (in the US) as we have patiently waited all year and called for better than feared performance in the US economy.

Interestingly, we see a diverging path for Manufacturing and Services ahead short-term, which will likely wrongfoot many economists and traders.

Manufacturing is currently restocking, while services are on the decline. A decline in Services is basically what triggers an actual recession in payrolls.

Chart 1: The recession road map