In a study released last August by Cinch Home Services, a shocking 76% of Americans thought the U.S. was in a recession. The belief wasn't correct then nor was it accurate two months later, when a CNN poll found 75% of likely voters had drawn the same conclusion.
Just one week before Election Day last year, President Joe Biden used a third-quarter 2.6% bump in gross domestic product to remind voters the country most definitely wasn't in a recession.
“For months, doomsayers have been arguing that the U.S. economy is in a recession and congressional Republicans have been rooting for a downturn,” Biden said in an Oct. 27 statement. “But today we got further evidence that our economic recovery is continuing to power forward.”
Technically, a country is in recession when it experiences two consecutive quarters of economic contraction, a definition that roughly two-thirds of Americans couldn't identify in the Cinch study. But such a contraction is usually accompanied by a cooling job market with increased layoffs—the polar opposite of a U.S. economy that has churned out some 13.7 million jobs since Joe Biden took office.
But definitions aside, the recession watch became a media obsession throughout the 2022 cycle as Republicans assured reporters that President Joe Biden's low approvals—driven substantially by inflation and his handling of the economy—would doom Democrats in the November midterms.
As Yahoo Finance columnist Rick Newman documented, as early as October 2021 Bloomberg posited, "Is the U.S. already in recession?" By June 2022, Politico declared a recession "inevitable," and in August Forbes followed suit, asserting "a recession is coming." By February 2023, the Associated Press hedged its bets, predicting, "2023 U.S. recession now expected to start later than predicted." Truer words were never written.
But just like the red wave that never materialized, neither has the recession.
In fact, consumers appear to be gaining more confidence in the economy as Wall Street entertains the notion that the U.S. could avoid a recession altogether.
“The most anticipated recession in modern history may not come,” Jamie Cox, a managing partner at the firm Harris Financial Group, told Politico in an interview.
But a recession no-show won't be for lack of trying by Republicans, who not only ginned up the recession narrative but sought to use the debt default threat to blow up Biden's exceedingly resilient economy.
Miraculously, the White House struck a deal with House Republicans that not only avoided default, it also largely escaped GOP austerity cuts that could have easily tipped the thriving U.S. economy into recession.
Instead, the economy saw 2% growth in the first quarter of 2023, the S&P 500 climbed roughly 15% in the first half of the year (which also augurs well for the second half), roughly 1.67 million jobs have been created in 2023 (including June's 209,000 announced Friday), the 3.6% unemployment rate remains historically low, and robust 4.4% wage growth is above 4% inflation.
Frankly, Friday’s jobs report, while still strong, signaled a mild and necessary cooling of the economy, though most analysts predict the Federal Reserve will likely continue to raise interest rates.
“The labor market is slowing down, but it’s doing so from a position of strength,” Nick Bunker, research director at Indeed Hiring Lab, told Bloomberg. “Nothing is guaranteed, but the US labor market continues to point toward a slower, but more sustainable pace of economic growth.”
November 2024 is still a long way off, but at the moment, outside of the entirely delusional, no one can argue the economy is bad. In fact, Bidenomics—investing heavily in working Americans—has proven to be an unprecedented success.
It’s a good thing House Republicans are stacking up a series of legislative successes to run on next year, because piling up a bunch of fringe hobby horse investigations ain't gonna cut it in 2024.