Fidelity fund manager just issued a recession message

Economic Outlook - The U.S. economy is projected to grow again in 2026, avoiding recession, with AI spending becoming a key driver of GDP growth, contributing over 1% of GDP through various sectors [3][7] - Despite rising unemployment and inflation, the overall economic landscape remains diverse and has significant growth potential, with the U.S. economy valued at approximately $30 trillion [7] Labor Market Dynamics - The U.S. unemployment rate has increased to 4.4% from 4% a year ago, with over 1.2 million job losses reported in 2025, marking it as the 7th worst year for layoffs since 1989 [5] - The labor market is characterized by "low hiring, low firing," which is negatively impacting consumer sentiment [1] Consumer Confidence - Consumer confidence has sharply declined, reaching its lowest level since March 2014, influenced by geopolitical uncertainties and economic conditions [6] - The Conference Board consumer confidence index fell significantly, reflecting deteriorating expectations and current situation perceptions among consumers [6] Inflation and Economic Disparities - Consumer Price Inflation has risen to 2.7% from 2.3% in April, exacerbated by tariff-driven inflation [5] - The economy exhibits a K-shaped recovery, where high-income households are faring better than lower-middle-class households amid increasing layoffs [4]