Surprising strength in hiring and consumer spending along with signs that demand for autos and housing are stabilizing have some economists pointing to a third scenario that seemed improbable at the start of the year—an economic growth upturn.
The New York Times published a similar story under the headline “What Recession? Some Economists See Chance of a Growth Rebound.” Per the Times article:
After months of asking whether the Fed could pull off a soft landing in which the economy slows but does not plummet into a bruising recession, analysts are raising the possibility that it will not land at all — that growth will simply hold up.
And under the headline “Forget Hard or Soft Landing: Meet the Rolling Recession,” Bloomberg took a different slant:
...one industry suffers a contraction, then another, but the economy as a whole never swoons, and the job market largely holds up.
Bloomberg cites the downturn in housing and the current spate of tech layoffs as proof points for a rolling recession.
Much of the economic news supports the possibility that a recession can be avoided.
Not all the news is positive, however.
With so many conflicting indicators, it’s no wonder economists can’t agree on the direction of the economy.
The Conference Board forecasts U.S. gross domestic product (GDP) to contract three consecutive quarters this year.
The National Association for Business Economics (NABE) has GDP flat in Q1, an almost imperceptible dip in Q2, and growth again in Q3.
The Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters has U.S. GDP declining in only one quarter this year, and even then by only 0.1 percent.
The Wall Street Journal’s survey of U.S. economists has the probability of recession this year at 61 percent. The Journal forecasts a mild contraction in Q3 with growth resuming in Q4.
What’s hidden in the detail of the Journal’s survey is that one-fourth of the respondents don’t expect any decline in ’23. This includes economists at well-respected firms like Credit Suisse, Goldman, Sachs, Morgan Stanley, the National Association of Manufacturers, National Association of Realtors, Northern Trust, and Societe Generale.
This lack of consensus may be why The Washington Post published an opinion piece in late February with the headline “Don’t Believe What Anyone Says About the Economy. Even Me.” The article notes:
So what does the Partnership make of the data?
To continue reading, download this report.
Note: The geographic area referred to in this publication as “Houston,” "Houston Area” and “Metro Houston” is the nine-county Census designated metropolitan statistical area of Houston-The Woodlands-Sugar Land, TX. The nine counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.
Review the latest data on inflation in the Houston area.
Review the latest data on jobs in the Houston region.
Review the latest data on this key economic indicator.