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Turbulent times may be ahead for Hispanic workers, a new report from Wells Fargo found.

The firm expects Latino workers to take an outsized hit if a mild recession happens in 2023, like it is projecting.

“The Hispanic unemployment rate tends to rise disproportionately higher than the national average during economic downturns,” Wells Fargo chief economist Jay Bryson wrote.

For example, from 2006 to 2010, the Hispanic unemployment rate rose about 8 percentage points, while the non-Hispanic jobless rate climbed about 3 percentage points, the firm found. It also was higher than the non-Hispanic jobless rates in the early 1990s and in 2020, Bryson noted.

Job composition and age are to blame, the data indicates.

In construction, for instance, Hispanics account for one-third of workers, compared to 18% of total household employment. That interest rate sensitive sector will face “acute challenges in the year ahead,” Bryson said. Mortgage rates have jumped to over 6% and building permits have already fallen by more than 10% since the end of last year, he pointed out.

There will also be a steeper drop in goods spending over the next year as a consequence of the pent-up demand for services, he said. Right now, overall consumer spending is 14% higher than February 2020 and real services spending is up less than 1% during the same time period.

“The rotation in spending is likely to lead to sharper job cuts in goods-related industries beyond construction, including transportation and warehousing, retail and wholesale trade, and manufacturing — all industries in which Hispanics represent a disproportionate share of the workforce,” Bryson said.

However, job concentration in the leisure and hospitality sector, which was hit hard during the pandemic, may offset some of those losses.

Not only will consumers prioritize spending on missed vacations or eating out in the coming year, but employment in the industry is still about 7% below its pre-Covid levels, Bryson wrote.

The age factor also works against Hispanics, because workers tend to be younger than non-Hispanics.

“Junior workers tend to be laid off at a higher rate than workers with more seniority,” Bryson said. “Fewer years of experience makes it harder to find new employment in a weak jobs market.”

However, Bryson said he doesn’t expect the next downturn to be as damaging to the job market as the previous two recessions.

“Employers have spent the better part of the past five years struggling to find workers,” he said. “We anticipate employers will hold on more tightly to workers than during past recessions, having a better appreciation of how difficult it may be to hire them back.”

— CNBC’s Michael Bloom contributed reporting.

The U.S. economy is teetering on the brink of a serious downturn if the Federal Reserve doesn’t pump the brakes on its rate hikes, billionaire CEO Barry Sternlicht said.

The central bank has already raised interest rates four times this year and is widely expected to hike them by 75 basis points next week in an effort to tame inflation. Earlier this week, consumer prices rose 0.1% instead of the 0.1% decline economists surveyed by Dow Jones were expecting.

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However, Sternlicht believes the Fed was late to the game and is now being too aggressive.

“The economy is braking hard,” the chairman and CEO of Starwood Capital Group told CNBC’s “Squawk Box” on Thursday.

“If the Fed keeps this up they are going to have a serious recession and people will lose their jobs,” he added.

Consumer confidence is terrible and CEO confidence is “miserable,” Sternlicht said. Supply chain issues are being resolved, and inventories are now backing up in warehouses, which will lead to huge discounting, he said.

“The CPI, the data they are looking at is old data. All they have to do is call Doug McMillon at Walmart, call any of the real estate fellas and ask what is happening to our apartment rents,” he said, pointing out that the rate of rent growth is now slowing.

The continuation of rate hikes will also cause a “major crash” in the housing market, Sternlicht predicted. The once-hot real estate market is swiftly slowing down, with mortgage rates for a 30-year fixed loan over 6% — up from 3.29% at the start of the year, according to Mortgage News Daily.

While the Fed’s target is 2%, inflation should run at 3% to 4%, Sternlicht said.

“Inflation that is driven by wage growth is fabulous. We should want wages to go up,” he said.

“You can pay higher rents, you can buy your equipment, you can go to the restaurant if you have high wage growth.”

As for when the “serious recession” will hit, Sternlicht believes it is imminent.

“I think [in the] fourth quarter. I think right now,” he said. “You are going to see cracks everywhere.”

Correction: Doug McMillon is CEO of Walmart. An earlier version misspelled his name.

Retail sales numbers were better than expected in August as price increases across a multitude of sectors offset a considerable drop in gas station receipts, the Census Bureau reported Thursday.

Advance retail sales for the month increased 0.3% from July, better than the Dow Jones estimate for no change. The total is not adjusted for inflation, which rose 0.1% in August, suggesting that spending outpaced price increases.

Inflation as gauged by the consumer price index rose 8.3% over the past year through August, while retail sales increased 9.3%.

However, excluding autos, sales decreased 0.3% for the month, below the estimate for a 0.1% increase. Excluding autos and gas, sales rose 0.3%.

Sales at motor vehicle and parts dealers led all categories, rising 2.8%, helping to offset the 4.2% decline in gas stations, whose receipts tumbled as prices fell sharply. Online sales also decreased 0.7%, while bar and restaurant sales rose 1.1%.

Revisions to the July numbers pointed to further consumer struggles, with the initially reported unchanged but to a decline of 0.4%.

Also, the “control” group that economists use to boil down retail sales, was unchanged from July. The group excludes sales from auto dealers, building materials retailers, gas stations, office supply stores, mobile homes and tobacco stores, and is what the government uses to calculate retail’s share of GDP.

“Higher inflation drove the top line sales figure but volumes are obviously falling because on a real basis, sales are negative,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Core retail sales being well below expectations will result in a cut to GDP estimates for Q3 as stated.”

Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the release “a mixed report, but we see no cause for alarm.” He said the slump in housing will depress some related sales numbers, but overall spending should up as real incomes rise.

The retail numbers led a busy day for economic data.

Elsewhere, initial jobless claims for the week ended Sept. 10 totaled 213,000, a decrease of 5,000 from the previous week and better than the 225,000 estimate. Import prices in August fell 1%, less than the expected 1.2% decline.

Two manufacturing gauges showed mixed results: The New York Federal Reserve’s Empire State Manufacturing Index for September showed a reading of -1.5, a massive 30-point jump from the previous month. However, the Philadelphia Fed’s gauge came in at -9.9, a big drop from the 6.2 in August and below the expectation for a positive 2.3 reading.

The two Fed readings reflect the percentage of companies reporting expansion versus contraction, suggesting manufacturing was broadly in a pullback for the month.

The reports, however, pointed to some softening in price pressures. For New York, the prices paid and prices received indexes respectively declined 15.9 and 9.1 points, though both remained solidly in growth territory with readings of 39.6 and 23.6. In Philadelphia, prices paid fell nearly 14 points but prices received increased 6.3 points. Those indexes respectively were 29.8 and 29.6, indicating that prices are still rising overall but at a slower pace.