Where’s the recession we were promised? In the summer of 2022, The Wall Street Journal surveyed economists from around the country and more than 60% said they predicted a recession within the next year. It wasn’t a wild assumption — the indicators were indicating. GDP was down as the Federal Reserve began to raise interest rates to fight inflation. Which, historically, usually brings a recession.
Yet now in the summer of 2023… where is it? WSJ looks at the four main economic factors that have so far kept the recession at bay. Though that doesn’t mean we’re in the clear.
0:00 Why a recession was predicted
1:07 The usual three suspects were strong
2:50 A “mortgage winter” buffered rising interest rates
3:50 Why the recession watch isn’t over
News Explainers
Some days the high-speed news cycle can bring more questions than answers. WSJ’s news explainers break down the day’s biggest stories into bite-size pieces to help you make sense of the news.
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Where’s the Recession? The Four Economic Factors Keeping It Off
In a time of global economic uncertainty, one of the most pressing questions on everyone’s mind is, “Where’s the recession?” With a worldwide health crisis, tensions between superpowers, and countless industries affected by shutdowns and restrictions, many people expected an imminent economic downturn. However, recent analysis suggests that there are four significant economic factors keeping the recession at bay: government stimulus, technological advancements, changing consumer behavior, and a strong housing market.
First and foremost, government stimulus has played a crucial role in helping economies stay afloat. Governments worldwide have injected massive amounts of money into their respective economies through stimulus packages, grants, and loans. These measures aim to support struggling industries, preserve jobs, and boost consumer spending. The injection of cash has prevented businesses from collapsing, allowed individuals to meet their financial obligations, and overall stimulated economic activity. While the long-term effects of such policies are unknown, they have undoubtedly helped prop up the economy in the short term.
Secondly, technological advancements have been a driving force in keeping the recession at bay. The pandemic has accelerated the adoption of digital technologies across various sectors. Remote work has become the norm for many professionals, and e-commerce has experienced unprecedented growth. Companies that have swiftly adapted to this new reality have been able to thrive, while those lagging in technology integration have struggled. Furthermore, emerging technologies like artificial intelligence and automation have boosted productivity, creating new opportunities and jobs. These advancements have not only allowed economies to function during the crisis but have also set the stage for future growth.
Changing consumer behavior is another crucial factor in the absence of a recession. As the pandemic reshaped society, people’s spending habits have profoundly shifted. With limited opportunities for travel, dining out, or attending events, consumers began redirecting their money towards different areas. Home improvement, health, and wellness, and online entertainment have witnessed a surge in demand. Companies catering to these new consumer needs have experienced growth and success. This adaptability in consumer behavior has helped sustain economic activity and mitigate the impact of other struggling sectors.
Lastly, the housing market has been a surprising stronghold amid the pandemic. Low-interest rates and changing preferences have spurred demand for housing. Remote work has made it possible for people to move away from urban areas and seek larger, more affordable homes in less densely populated regions. Additionally, low inventory levels have driven up prices in many markets. This surge in the real estate sector has provided jobs and contributed to economic stability. Despite initial fears of a housing market collapse, it has turned out to be a crucial pillar of economic resilience.
Although the absence of a recession may seem counterintuitive given the challenges faced globally, these four economic factors continue to act as a buffer. Government stimulus measures, technological advancements, changing consumer behavior, and a strong housing market have all played vital roles in preventing a downturn. However, it is essential to remember that the future remains uncertain, and the long-term effects of these factors are yet to be fully understood. As the world continues to navigate through this crisis, it will be crucial to monitor these factors closely and adapt accordingly to ensure lasting economic stability.
Nothing but lies and liars
To hate someone enough to make their unhappiness your economic base, would indicate a problem, in itself.
Amazing video and thank you for breaking it down!! Despite the economic downturn, I'm so happy have been earning $56,000 returns from my $8,000 investment every 14days with the help of Brisa Richardson.
Money that is real can be not real, and money that is not real can be real. That pisses me off!!!
We Are in Unchartered Financial Waters! every day we encounter challenges that have become the new standard. Although we previously perceived it as a crisis, we now acknowledge it as the new normal and must adapt accordingly. Given the current economic difficulties that the country is experiencing in 2023, how can we enhance our earnings during this period of adjustment? I cannot let my $680,000 savings vanish after putting in so much effort to accumulate them.
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly
It goes to poor countries, well done
Most likely they will try to have the recession hit after the next election
Cryptocurrency investment trading is true, so many people are benefiting from it…
Recession fears mount on Wall Street and inflation remains well above the Fed's 2% target, some of the top commentators in markets, business, and economics have been sounding off on just how bad they think the next downturn might be — and how far stocks may have to fall. I need ideas and advice on what investments to make to profit during such economic crisis.
Biden will wait til after the Election to have a Recession!
US needs to increase supplies of everything to get prices on gas, rent, etc back down to reality.
They are faking it for sure. You can't trust USA.
Rather than attempting to predict future recessions and risking financial losses, a more effective strategy is to build a well-diversified portfolio that can withstand various market conditions. This approach has allowed some individuals to consistently generate substantial returns, averaging around 150K every quarter as reported by Bloomberg.
I think we are too obsessed about the economy crashing. In the right sense, the economy never crashes. It just undergoes cycles, and almost always recovers. So I really don't care what the predictions are. I just want to grow my portfolio. I read that people are pulling in massive profits despite the downturn. Any tips on how they do it?
Its STILL HERE
In light of the ongoing global economic crisis, it is crucial for everyone to prioritize investing in diverse sources of income that are not reliant on the government. This includes exploring opportunities in stocks, gold, silver, and digital currencies. Despite the challenging economic situation, it remains a favorable time to consider these investments.
It’s a recession for the middle class only, not for rich or poor people
I am not a fan of the fed, or Biden economics.
It's here but there is some kind of strange reason the media wants to keep denying it
What stimulus? They were long gone and not much with just a few thousands. All money I am spending now from my income.
Bidenomics baby, recession cancelled!
The inflation was payed off by all the suckers that supported the effects of the inflation. Was supposed to be a huge recession in 2020 was covered up and postponed with inflation in a bigger pain down the road. The sole beneficieries, the corporations.
The stimulus checks were 2 yrs ago. With inflation, those dollars are long gone.
We are beating inflation by printing new money and keeping the stock market up.
Take the tech companies out the S&P 500 and what you got ………….Recession.
Thanks, O’Biden.
Recession is waiting for elections! It will start after elections.
They measure whether or not there's a recession based on how the rich are doing, everyone else has been in a recession for ages.
Nice
Very positive analysis.
Thanks.
Straight to depression!!!
Japan discharges sewage (not normal cooling water) contaminated by earthquake damage, carbon-14, iodine-129, tritium, and other up to 64 radioactive elements, which cannot be removed by current technology, and the United States, China, etc. have banned Japanese seafood Because China is against this, the United States will silence this matter, let the media block the news, although the United States itself has banned Japanese seafood, politicians can destroy it regardless of the survival of human beings around the world
"This time it's different." She said it Bears. Stay strong boys.
The government keeps spending into oblivion lol
Whether we have a recession or not I don’t care. What do care is that 99% of the people of this country can’t afford living anymore – or dying if you consider the prices for a funeral. Both Trump and Biden have done a terrible job with the economy.
Just redefine what recession is and bam! no recession.
China did that with poverty and air pollution.
Be like China.
You can bet if Trump was president the media would be scream in recession that's how you know we are in a recession.
the politicians overspend on projects enriching their families and supporters, creating inflation, which the middle and lower class pay for with higher interest rates, layoffs, and higher prices on basic goods. Basically, legalized corruption. Well, let them eat cake.
If youre young just ignore the news and dca into your pension investment etc
If youre retired or near just have a 50/50 portfolio and if stocks go down you have the bonds to fall back on till the stocks go up.
No need to panic buy or panic sell,
That is unless you are trader ( gambler ).
Its just nees for news sake to try to control the maekets so that the ones who know wgat news is coming can place their bets beforehand and make a killing.
He may take the order from Biden printing dollar for all ,specially for foreign affair.
Number house gone and number crime arrive..
Remember we are all same stagevand it not 80 century that needed you to defeated the tyran . We pray you Change
When I wake up in the morning, and the sunlight hits my eyes, just one look at you and I know it's going to be, a lovely day…….!
Ahhh it's here ????
The only solution to the run away inflation is a biblical crash.
A biblical crash will help reduce the over-consumption; hence, slow the global warming and climate change.
Let’s wait until those student loan payments start coming at people. I think that will greatly reduce spending and may lead to a recession
The recession's short-term impact likely will be determined by government actions. If the Feds uses QE to bail out failing large organizations and helps the struggling little guy (like we've done for decades), the short term might not be so bad b/c we have gotten so good at doing this. However, no matter what the FED does, with way too much money printing and resulting debt, the long-term is going to be horrible. B/c we don't have enough assets to sell to pay down the debt, there are no actions anyone can take that allow us to avoid an inevitable massive downturn.
The current market/economy is unnecessarily tougher for boomers/senior citizens, I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio of $2m. I’m really worried about survival after retirement.