A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.
The recession America was expecting never showed up.
Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Inflation had spiked to the highest level in decades, and a range of forecasters thought that it would take a drop in demand and a prolonged jump in unemployment to wrestle it down.
Instead, the economy grew 3.1 percent last year, up from less than 1 percent in 2022 and faster than the average for the five years leading up to the pandemic. Inflation has retreated substantially. Unemployment remains at historic lows, and consumers continue to spend even with Federal Reserve interest rates at a 22-year high.
The divide between doomsday predictions and the heyday reality is forcing a reckoning on Wall Street and in academia. Why did economists get so much wrong, and what can policymakers learn from those mistakes as they try to anticipate what might come next?
Pay no mind to the widespread layoffs and skyrocketing prices.
What’s your source?
Recent December data shows unemployment rate at 3.7% with 199,000 added jobs:
Nonfarm payrolls rose by a seasonally adjusted 199,000 for the month, slightly better than the 190,000 Dow Jones estimate and ahead of the unrevised October gain of 150,000, the Labor Department reported Friday. The numbers were boosted by sizeable gains in government hiring as well as workers returning from strikes in the auto and entertainment industries.
The unemployment rate declined to 3.7%, compared with the forecast for 3.9%, as the labor force participation rate edged higher to 62.8%. A more encompassing unemployment rate that includes discouraged workers and those holding part-time positions for economic reasons fell to 7%, a decline of 0.2 percentage point.
The multitude of headlines weve been seeing for months of companies laying off thousands at a time https://news.crunchbase.com/startups/tech-layoffs/
Thanks for the link. If I’m reading it correctly, the total number of tech layoffs for the whole 2023 was 191,000, which is less than the 199,000 new jobs added in just the single month of December 2023?
In 2023: More than 191,000 workers in U.S.-based tech companies (or tech companies with a large U.S. workforce) were laid off in mass job cuts.
As someone that works in tech, it should be noted that many of those laid off were probably able to find work elsewhere. It’s a shitty market for tech right now, but there are jobs out there.
The industry that is really struggling is recruitment. Many people that I spoke to that were laid off from Amazon are still struggling to find work a year after losing their jobs. If you build a career around hiring in tech, and the industry goes into layoff-mode for 16 months, there’s not much demand for your skills.
Inflation being higher than wages?
Give it up OP. No economy news is good enough for this crowd. It’s, uh, Biden, or billionaires, or Wall Street, or someone, trying to fool us.
Inflation is well under control, yet the guy above you is bitching about skyrocketing prices. No, prices did not come back down, not yet anyway. Why would they?! Have they ever?! Saw something the other day that indicated prices might fall just a bit? In any case, deflation is generally a bad thing. And I mean bad for the general economy we all participate in, not just megacorp profits.
See, lemmy interprets any positive financial news as, “All is well!” Gets mad.
Fuck no all is not well, and anyone paying attention sees this. My #1 concern is rental prices. The buyers’ market may sort itself out eventually, usually does, but renters are taking a fucking of historic proportions. Home ownership has always been a path to savings, building wealth and retirement. Yet young people are calling bullshit, wanting to throw that out because they can’t get theirs. I get the anger, but call your reps, fight the good fight. This one is a big, big deal.
I’m down for some legislation limiting corporations from owning $X properties, but the devil is in the details. And oh gods are there details. Plus, we gotta fight uphill against the rich and their lobbyists.
You’re trying to bring positive news to young people with shit jobs who have watched every chance of a future yanked out from under them. I get the cynicism, I really do. But FFS, look at the poster below me decrying tech layoffs. He doesn’t understand that employment space, he’s getting angry reading headlines, has no experience or context.
Those of us in the tech sector are used to it. We have the skills to run right out and get another good paying job. And we always get paid more. That sucks, but it’s also reality. And “thousands” ain’t much in a country of 333,000,000.
Anyway, I’ve splatted enough BS. Going to work on fixing my house up a bit.
what kind of weird inflation rant it this. admitting that the price spikes are still around but inflation is under control, and that it’s actually a good thing that all the prices went up while my wages stayed the same, prices going down is a bad thing. No explanation, just because. Is it because the rich get less money to trickle down to us?
Rage bait bot comment ^
Remember 2008-2010?
Layoffs (especially in the tech industry) have been highly-publicized, not widespread. There’s a difference.
You shouldn’t be getting downvoted. It’s true. Tech companies went on a huge hiring spree during Covid. The layoffs don’t even bring employment anywhere close to before that hiring spree.
As long as the rich people are making more money, the economy is great. The poors don’t matter when it comes to the economy. We suffer when it’s doing well, we suffer worse when it’s doing poorly.
It’s because the field of economics is just bullshit
No no, you can definitely predict money stuff with a crystal ball and arguing with people.
Definitely haha. Economics is similar to theoretical physics in that most of it only works in a vacuum, but I respect theoretical physicists more because they tend to view people as more than just cogs in the money machine.
When you study economics you literally spend 0 hours learning how to predict macroeconomic outcomes such as inflation/gdp growth. The reason is that these systems are too complex to predict well, except in the very short run. Yet policymakers continue to ask economists to make long-run predictions, and many continue to comply.
I personally was asked to be a member of an expert committee for my country’s central bank. For any prediction my truthful answer was: I don’t know, so they kicked me out.
what kinds of stuff did they want you to predict?
The economy is doing great. That means all the poors are getting poorer, just as intended.
But homelessness is up 50% since 2015, with this year being the largest increase since… We started keeping numbers.
But nope no recession here. Can’t have one if we just keep redefining the word! Lmao.
no recession if the homeless keep working
The difference is how the money is being distributed
As one particular youtube Economist puts it: nobody can predict the future, least of all economists.
The best they can ever do is look at the data in front of them and say, “well, in the past we’ve seen this sort of situation lead to X, so we think that we’re likely to see X again in the near future.” On top of that much of what they are doing is probability based best guesses. So, they may be looking at economic data and say, “well, we think it’s a 65% chance of X.” And then “news” organizations will report that as “Economists think X will happen, and here’s how it’s going to cause DOOOOOOOOM!” Of course, those numbers assume they have good data, which is not always the case.That said, it’s probably better to bet with macroeconomists than against them. They may get it wrong, but they probably get it right more often. Just don’t bet the entire farm on what they say. 'Cause, you know, they do get it wrong from time to time.
youtube Economist
holy shit lmao
He’s on Youtube and claims to be an Economist. I can’t prove it one way or the other, though I personally believe he is. Didn’t want to look like I was advertising, so didn’t name/link him and also didn’t want to claim his tagline as my own.
There are plenty of highly educated making videos explaining happenings in their fields. This ridicule is uncalled for
lol
Young people - oh my god old people believe everything they read on Facebook!
Also young people - well this guy on YT says he’s an expert so it must be true
No information is better than the sources provided
This is why I follow the old saying: “Believe everything you read in the newspapers.”
We’re just saving up for an even better recession.
The 1% can’t let the market crash until the 99% are long.
Articles like these are incredibly bearish IMO
How many articles have been out like “company name is laying off 10000”? I don’t trust the soft landing. For example all the toxic assets still exist from the bank mergers, the only thing they did was sell off regular assets
imo there won’t be a recession until economists stop predicting one. As soon as they start talking about a boom then you should get ready.
When inflation was above 5% the real interest rate (nominal interest rate minus inflation) was still negative, which is expansionary. Even now that inflation has cooled off it’s still only positive 2% which is not that high by historical standards.
Couple that with firms reopening, and taking staff off furlough, and it’s not really that surprising that a recession didn’t eventuate. This wasn’t the 70s and early 80s with stagflation.
Court vizers amazed reality didn’t conform to their burned chicken bones.
You’ve got to have the euphoria stage first. “Soft landing achieved”, “the naysayers are wrong”, and “things are amazing now” are the kinds of things you hear at such times. The idea is to allay people’s fears so that they keep or increase the amount of money they have in the market. After that, you crash hard and fast so that people who can’t afford to ride it out, have to withdraw money at market lows. This maximizes return for the rich who can swoop in and buy on the cheap. Then the narrative will be “the signs were all there”, “any idiot could have seen it coming”, and “it’s the people’s fault for being irrationally exuberant and irresponsible with their money”.
This guy gets it
Hear ye, hear ye
“unprecedented, once in a hundred years phenomenon”
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Give it 2 more months, and it should be shot.
You CANNOT have as-much missing-supply-chain as we now have, and remain viable, endlessly.
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