10/23/2023 0 Comments Harvard itunes uConsider the following four displays of resilience: economy’s resilience, typically because they were based on historical models and precedent – not situational and idiosyncratic context. Many of the negative forecasts followed a pattern of underestimating the U.S. What went wrong, or, more appropriately, what went right? As the unemployment rate remains near its 60-year low there is no sign of recession. Job openings have come off their highs as firms feel under less strain, and quit rates have fallen as workers feel less enticed to jump ship - all while hiring (“payrolls”) continues at a robust pace. Some leaders predicted a “ hurricane” would hit the economy shortly others dismissed even the possibility of a soft landing.īut as the below graphic illustrates, that is exactly what has played out over the last 16 months. Recession Prophecies, UnfulfilledĪs in the pandemic, when doomsayers predicted a “ Greater Depression,” much negativity dominated public discourse of the last year and a half. What comes after the soft landing (if in fact it can be completed)? To answer this question, we look at why the recession calls were wrong and what lies ahead. Though this is welcome news, the protracted uncertainty surrounding the economy has confounded many leaders - and came at a cost for those who hunkered down prematurely in anticipation of recession. The labor market, the only reliable evidence that the economy is in recession, has cooled without pushing up the unemployment rate. But today, the soft landing is well advanced, even if not complete: The Fed has found success in lowering inflation without triggering a recession. More than a year has passed since a recession was seen as a foregone conclusion and a “soft landing” pronounced near impossible. economy has defied the doomsayers once again.
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