The Boston Globe, July 2023
The long-feared U.S. recession might be a no-show.
Since early 2022, economists have warned that the Federal Reserve’s aggressive effort to tame high inflation with rising interest rates would trigger a downturn costing millions of Americans their jobs. But a recent spate of positive data has led to increasing optimism that the United States might defy history and return inflation to normal levels while avoiding a recession, allowing Americans to dodge an economic bullet and President Biden a political one.
A survey of economists at leading US businesses released this week showed a large majority put the risk of a recession starting in the next year at 50 percent or less, a significant improvement from this spring. Jan Hatzius, the chief economist at investment bank Goldman Sachs, was even more bullish, estimating in a recent research report that there is just a 20 percent chance of a recession. The good feelings appear to be contagious, as consumer confidence — the closely watched metric of average views on the economy — jumped to its highest level in two years, according to a report released Tuesday.