Today, Explained Where did the recession go?
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Aug 1, 2023 
Tracy Alloway, co-host of the Odd Lots podcast and an economics expert, teams up with Greg Ip, Chief economics commentator at The Wall Street Journal. They tackle the surprising resilience of the U.S. economy and the paradox of declining inflation alongside low unemployment. The duo discusses the implications of government spending on healthcare and climate initiatives, while also exploring the potential for a 'soft landing' instead of a recession. Their insights challenge traditional economic theories amidst ongoing uncertainty.
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Recession Resistance
- Despite many predictions, the U.S. has avoided a recession.
- Inflation is decreasing and unemployment remains low, defying typical economic theories like the Phillips curve.
Optimistic Outlook
- Businesses, scarred by pandemic undercapacity, remain confident in spending and investing.
- Government spending, like the Inflation Reduction Act, further boosts economic resilience.
Doomer Case
- How interest rate hikes affect the economy remains unclear, causing concern. The current situation resembles the 1918 Spanish flu more than the 1970s inflation, with sharp price movements.