The U.S. may already be in a “plain vanilla recession,” according to Danielle DiMartino Booth, CEO and chief strategist for Quill Intelligence and a former advisor to the Federal Reserve Bank of Dallas.
DiMartino Booth explained how a weakening job market and increasing Chapter 11 bankruptcy filings signal that the U.S. is already in a recession. She believes it started sometime around last October. Additionally, declining housing prices and increasing apartment supply suggest this trend may continue, she said.
Artificial intelligence is a key tool for employers looking to cut costs, with the highly regarded CFO Survey from the first quarter of the year showing that nearly 60% of companies overall are using AI. Of the largest companies, 84.2% are using it, up 10 percentage points from the prior quarter.
“America’s chief financial officers — tasked as they are with controlling costs in an economic downturn — have clearly demonstrated that AI will become a mainstay as chapter one of the rollout of this technology continues to play out, replacing warm bodies with technology,” DiMartino Booth told CNBC.
Currently, employers are adjusting as they discover how AI best fits into their business models. DiMartino Booth suggested that “for the next six to 18 months, AI is going to … feel like a weapon of mass destruction.”
However, she also said, “there is going to be a much happier ending to AI,” as the technology has the capability to revolutionize the health care and education systems.
DiMartino Booth also said the Fed isn’t entirely to blame for the high levels of inflation explaining that the “interest rate policy is a blunt instrument.” However, she noted the central bank owned over one-quarter of the mortgage-backed securities market coming out of the post-pandemic era, giving its policies a hand in the run-up to the inflation U.S. consumers are feeling today.
Watch the video above to learn more about what Danielle DiMartino Booth has to say about the state of the U.S. economy, including why the nation may already be in a recession, ways AI is changing the workplace and how the economy can work best on a global scale.