(Bloomberg) -- U.S. equities are poised for more upside even with the imminent slowdown in economic growth, according to Mizuho Securities’ Steven Ricchiuto.

“The reality is we are in an expansion phase,” Ricchiuto, chief U.S. economist at Mizuho, said Thursday in an interview on Bloomberg Radio. The period, he noted, unfolds with “the initial boom in the economy during the recovery phase, and then we settle down to a more protracted expansion environment -- that’s where we are right now.” 

“We’re at the inflection point from the boom to the expansion and that’s why you’re seeing some flip-flopping in some of the data that’s taking place,” Ricchiuto added.

New applications for unemployment benefits rose unexpectedly last week. The downside comes as a surge in initial claims, mostly stemming from higher counts in California, outpaced analyst projections and further suggest a recovery in the labor market is still a ways away. 

But looking to data elsewhere, Ricchiuto found a catalyst in the “substantial reduction” of continuing claims across all programs. With Federal benefits having ended the first week of September, he said “we can argue that some of that is people falling off the rolls -- true -- but some of that is people getting jobs.”

According to Ricchiuto, the U.S. economy is set to grow at a 2-2.5% rate for a very long time and he is adamant “we will eventually reproduce the type of gains we were seeing in the labor market prior to Covid.” 

“It’ll happen again, it will just take time,” he said.

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