Six months into 2023, a much-predicted recession is yet to arrive – and some experts now suggest the risk may have blown over.
"As things cool down with the Fed rate hikes, we're just not likely to tip over into recession," said Seth Carpenter, Morgan Stanley's chief economist.
Here's a selection of recent upbeat takes on the economy from prominent market voices.
Since the start of 2023, American companies and investors have been bracing for a dreaded economic downturn spawned by the steepest surge in interest rates since the 1980s.
But six months later, the most predicted recession in recent memory is yet to materialize – and some experts are now suggesting the risk may have blown over. Encouraging economic data – highlighted by a combination of resilient job-market numbers and cooling inflation – gives some support to that argument too.
On its part, the stock market has defied Wall Street's doom-and-gloom predictions for the economy to notch the best first-half gain since 2019 – thanks in part to an explosion of investor interest in artificial intelligence.
Morgan Stanley's chief economist Seth Carpenter and Nobel laureate Paul Krugman are among top voices that remain bullish on the trajectory of the economy. Here's what they had to say:
Seth Carpenter, global chief economist at Morgan Stanley
"The labor market is one of the key stories so far this year," the bank's top economist recently told Yahoo Finance. "There has been clear slowing, however, the rate of job gains has been pretty strong and we think that's been contributing to resilience spending."
"That also means as things do cool down with the Fed rate hikes, we're just not likely to tip over into recession," he added.
Paul Krugman, Nobel-prize winning economist
"US economic news has been increasingly encouraging: falling inflation, no sign of a recession," the economics professor at the City University of New York tweeted in late June.
More recently, he wrote in a New York Times op-ed this week: "The plunge in the misery index reflects both what didn't happen and what did. What didn't happen, despite a drumbeat of dire warnings in the news media, was a recession. The U.S. economy added four million jobs over the past year, and the unemployment rate has remained near a 50-year low."