this post was submitted on 27 Jan 2024
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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?

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[–] MicroWave@lemmy.world 17 points 10 months ago* (last edited 10 months ago) (3 children)

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.

https://www.cnbc.com/2023/12/08/jobs-report-november-2023-us-payrolls-rose-199000-in-november-unemployment-rate-falls-to-3point7percent.html

[–] blazera@kbin.social 22 points 10 months ago (2 children)

The multitude of headlines weve been seeing for months of companies laying off thousands at a time https://news.crunchbase.com/startups/tech-layoffs/

[–] MicroWave@lemmy.world 23 points 10 months ago

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.

[–] EnderMB@lemmy.world 3 points 10 months ago

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.

[–] Linkerbaan@lemmy.world -3 points 10 months ago

Inflation being higher than wages?