Rosenberg, a former chief North American economist at Merrill Lynch Securities, “known as a Wall Street prophet,” recently said that the US economy is facing many difficulties in 2026, and the job market may experience a sharp contraction, which will weaken economic prospects and force the Federal Reserve to take dramatic aggressive interest rate cuts. In an interview, Rosenberg said, “The biggest surprise will be for people to realize that the labor market is not cooling down, but shrinking.” Currently, the US unemployment rate has climbed from 4% at the beginning of last year to 4.6% in November last year. Rosenberg expects the unemployment rate to break through the 5% mark soon, and said “it is likely to test the 6% mark before the end of the year.” Rosenberg believes that although there was a gap in official economic data due to the long-term shutdown of the US government in 2025, the published labor market report clearly shows that the rift is showing. According to a recent report, the US layoff rate in October last year rose to 1.2%, the highest level in a year. While this is still at a low level, it indicates that the bottom has been reached and the trend is moving upward. Rosenberg pointed out that the trend of layoffs is on a moderate upward trend. At the same time, he said, the recruitment rate was “plummeting like cutting butter with a hot knife.”

Rosenberg, a former chief North American economist at Merrill Lynch Securities, “known as a Wall Street prophet,” recently said that the US economy is facing many difficulties in 2026, and the job market may experience a sharp contraction, which will weaken economic prospects and force the Federal Reserve to take dramatic aggressive interest rate cuts. In an interview, Rosenberg said, “The biggest surprise will be for people to realize that the labor market is not cooling down, but shrinking.” Currently, the US unemployment rate has climbed from 4% at the beginning of last year to 4.6% in November last year. Rosenberg expects the unemployment rate to break through the 5% mark soon, and said “it is likely to test the 6% mark before the end of the year.” Rosenberg believes that although there was a gap in official economic data due to the long-term shutdown of the US government in 2025, the published labor market report clearly shows that the rift is showing. According to a recent report, the US layoff rate in October last year rose to 1.2%, the highest level in a year. While this is still at a low level, it indicates that the bottom has been reached and the trend is moving upward. Rosenberg pointed out that the trend of layoffs is on a moderate upward trend. At the same time, he said, the recruitment rate was “plummeting like cutting butter with a hot knife.”