The US has seen GDP growth blow past predictions, hiring numbers surge unexpectedly and consumers still spending even as interest rates climbed — deftly averting a dreaded recession in 2023.
While interest rates have hit the highest level in more than two decades, a situation ordinarily accompanied by higher unemployment and a consumption pullback, it has not been the case this time.
Low unemployment, wage growth and hiring have underpinned consumers’ willingness to spend.
The situation stems from turmoil businesses experienced during Covid-19 when executives struggled to hire, train and retain talent.
This has made them think twice before resorting to job cuts, even when faced with a possible economic slowdown, said EY chief economist Gregory Daco.
Instead, they favored reducing hiring.
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“As a result, we’ve seen more resilience in the…
