Odd Lots Why So Many People Got This Year's Economy Wrong
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Dec 21, 2023 
Anna Wong, the Chief US economist for Bloomberg Economics, shares her insights on the unexpected resilience of the US economy in 2023, defying widespread recession predictions. Despite her earlier forecasts, current data shows low unemployment and inflation near target levels, raising questions about the accuracy of recession models. The conversation delves into confusing economic signals, credit scores influenced by pandemic forbearance, and the complex drivers of inflation, providing a cautiously optimistic outlook for the future.
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2023 Economic Predictions
- At the end of 2022, the consensus was that a recession would occur in 2023.
- This prediction did not materialize, leaving many surprised by the continued economic strength.
Bloomberg's Recession Model
- Bloomberg Economics' recession model predicted a recession in late 2023 or early 2024.
- The model used 13 indicators, including yield curve spreads and sentiment, similar to the Conference Board's Leading Economic Index (LEI).
Inflation and Unemployment
- Despite CPI falling from 9% to the Fed's target and unemployment at 3.7%, it's too early to declare victory over inflation.
- The disinflation might be partly due to factors outside the Fed's control.