SSLY - Looking For The 'Missing Link' In Failed Recession Models

2024-01-23 12:22:00 ET

Summary

• The resilience of the US economy in 2023 was a surprise for some economists.
• An intriguing explanation for why many recession models failed last year: resiliency in residential construction payrolls.
• Sliding employment in the housing construction industry has been a useful recession predictor, but has been conspicuously absent lately.

The resilience of the US economy in 2023 was a surprise for some (many?) economists. From the start of last year through the first half, and in some cases, into early Q3, an ample supply of recession warnings flowed like wine from the lips of the punditocracy. A careful reading of the data suggested otherwise, but high-risk warnings draw a crowd and so the dark forecasts endured and prospered, running well beyond their shelf life....

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