Soft landing, here we come?
An ever-widening range of indicators suggest that the conventional wisdom – that the US economy needed a recession to bring inflation under control – was wrong
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UNTIL quite recently there was a near-consensus among forecasters that the United States economy was headed for a recession. In fact, it’s been exactly one year since Bloomberg declared that, according to its models, the probability of a recession by October 2023 – that is, now – was 100 per cent.
Oops.
Okay, it’s possible – barely – that a recession has begun but isn’t in the data yet. Economists of a certain age remember that for much of 2008 some commentators denied that there was a recession underway, but the official business cycle chronology now says that the worst slump since the 1930s began in December 2007. That said, warning indicators like the Sahm rule, which looks at the unemployment rate compared with its previous low, were flashing red by the summer of 2008, in a way they aren’t now.
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