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?
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.