So many pundits are expecting a recession and it keeps not coming. Let’s open a new thread to keep track of this most expected recession in modern time.
People have been predicting a recession for more than a year now?
Manufacturing and housing conditions are starting to improve, which could stall a recession.
And Japan is surging ahead.
The May PMI report showed Japan’s business activity accelerating this month, with services growth surging.
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Ok. Germany enters recession. Funny that DAX just made an all time high this week.
People are still willing to spend big money on vacations.
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https://www.cnn.com/2023/06/05/economy/recession-chances/index.html
But the case for a 2023 US recession is crumbling for a simple reason: America’s jobs market is way too strong.
Hiring unexpectedly accelerated again last month, with employers adding an impressive 339,000 jobs in May. Not only is that more than any major forecaster expected, but it’s more jobs than the US economy added in any single month in 2019, a very strong year for the jobs market.
“This economy is incredibly resilient, despite all the slings and arrows – despite the banking crisis, rate hikes, the debt ceiling,” Mark Zandi, chief economist at Moody’s Analytics, told CNN in a phone interview on Friday.
If history rhymes, recession should begin x months after the inverted yield re-invert. Long way to go. Meanwhile enjoy the ride. Btw, recession should be mild if it ever happens, we are still in the secular bull market started from 2009.
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Mark Zandi, chief economist of Moody:
What recession? The consensus view that recession was virtually a slam dunk looks increasingly off base. Yes, there will eventually be one, but odds that a downturn is dead ahead are receding. There are a bunch of reasons why the economy is hanging tough. Here are my top three…
First, excess savings. Consumers couldn’t spend as they typically do during the pandemic as they were stuck at home. At the peak, excess savings amounted to 10% of GDP. Consumers have since been using the savings to supplement their purchasing power and calibrate their spending.
Second, labor hoarding. Businesses desperately want to avoid layoffs. Even before the pandemic they had big trouble finding and retaining talent. They also know that the labor shortages will be a perennial problem as the boomers are retiring and immigration is impaired.
Third, low leverage. Households and businesses have borrowed prudently, and their debt service burdens are historically light. They’ve also locked in the previously low rates. Some low income households and PE-acquired businesses have overdone it. But they are the exception.
Household savings remain well above pre-pandemic levels.
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This guy is fighting a one-man battle against the “Recession is coming!” narrative.
Mark Zandi is chief economist of Moody’s Analytics.
https://www.cnn.com/2023/06/20/opinions/us-economy-recession-zandi/index.html
I have been wondering the same:
For over a year, the strong consensus among economists, a vocal group of investors and CEOs has been that a recession is imminent — that an economic downturn is all but certain.
But wait. Where is the recession? Each passing month, the consensus looks increasingly off-base. Yes, the economy will ultimately slump, but odds are fading that a recession is dead ahead.
He actually said the four magic words:
Given history, there’s no shame in the consensus that we would follow a familiar recession pattern now. However, this time is different. Yes, the economy is fragile and vulnerable to losing the script. And goodness knows we have been off script more often than not in recent years. But odds are that we will buck history and avoid recession.
Zandi gave 5 reasons why he thinks recession is unlikely: robust consumer spending, light household debt load, labor hoarding among firms, low inflation expectation and low oil prices.
People forget we had a recession at the start of 2021. They just decided it want one. We also had a stock market circuit breaker event in 2020.
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Economic sentiment sees biggest increase since July 2022.
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Wall Street is dialing down its doom loop.
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Recession this year doesn’t seem likely. Analysts are revising growth upward.
https://twitter.com/carlquintanilla/status/1682133068730040321?s=46&t=e2DAkaxaGRhpAWcndjTw-g
Carl is outdated. Market is pricing in recession.