The constant drumbeat of warnings that a recession is impending persists, but the concerns that one would strike the United States in 2023 are starting to ebb away. There are signs that the economy is getting better, and it’s possible that the United States may be able to escape a big recession after all.
Mark Zandi, chief economist of Moody’s Analytics, was quoted as saying in Business Insider as saying, “Inflation is on its back heels.” According to Zandi, a reduction in inflation makes it less likely that the Federal Reserve would execute rate rises. This, in Zandi’s opinion, “substantially enhances the probability that the economy can navigate through without entering a recession in 2023.”
One of the more encouraging signals is a falling Consumer Price Index (CPI), which has fallen for six months in a row up until December, indicating that inflation is becoming less severe. The employment market is also doing well and is expected to continue doing well. More on this topic may be found at Business Insider:
At the same time, the labor market in the United States has considered the risk of a recession and basically shrugged its shoulders about it. Workers are still quitting their employment at rates that are close to records, and the percentage of those who are laid off is still very close to the record low. The United States created 223,000 payroll positions in December, which is far more than the 200,000 jobs that were anticipated by economists polled by Bloomberg — and the unemployment rate fell down to 3.5%, which is lower than the 3.7% that was forecasted…
The trend of fewer people filing for unemployment benefits at the end of December continued, according to BI, to be positive for the labor market on Thursday.
The optimistic outlook held by Mark Zandi is shared by other economists. According to the head economist at ZipRecruiter, Sinem Buber, who said in a statement on Thursday that combining CPI data coupled with “recent labor market indicators” implies an increased “chance of a soft landing,” Business Insider cites Buber’s statement.
Jerome Powell, the current chairman of the Federal Reserve, has previously given indications that he is skeptical about an economic collapse occurring in 2023. If, on the other hand, favorable trends continue, there is a good chance that the Federal Reserve will be able to accomplish its ultimate goal of maintaining price stability, so warding off a recession.