Why the Anticipated 2023 Recession Never Came

The widely predicted 2023 recession didn’t occur, defying forecasts including those from Federal Reserve economists. Fed Chair Jerome Powell acknowledged the unexpected robust economic performance. This resilience was attributed to the unique challenges posed by the pandemic and the substantial $5 trillion fiscal stimulus. Forecasting difficulties arose from the lack of historical parallels. A key factor was the resilient U.S. consumer, who, buoyed by pandemic-era savings and government support, spent more than anticipated. Revised estimates showed that consumers were in a stronger financial position than previously thought, contributing to higher spending power and averting the anticipated downturn.