Forget Taylor Swift — 2023 recession was thwarted by larger trend

Going into 2023, a prevailing sense of standard knowledge amongst economists, journalists and finance leaders was that the U.S. economic system was about to fall into recession.

Observers believed that, for one, the rate of interest will increase applied by the Federal Reserve in 2022 in its efforts to gradual inflation would inevitably drag the economic system down.

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“The MBA forecast calls for a recession in the first half of next year, driven by tighter financial conditions, reduced business investment and slower global growth,” wrote the Mortgage Bankers Association on Oct. 24, 2022. 

Then, on Nov. 18, 2022 The Economist revealed a narrative with the headline, “Why a global recession is inevitable in 2023.”

It didn’t occur. In reality, the U.S. economic system grew in 2023. And there are a selection of theories as to why these gloomy predictions turned out to be improper.

Most distinguished of these is that the job market unexpectedly remained largely sturdy throughout 2023 and unemployment stayed low.

And as inflation steadily fell, traders warmed to the concept that the Fed would gradual rate of interest hikes and may even start chopping them once more in 2024. The inventory market rallied to document highs.

There had been different broadly reported opinions on what stored the economic system out of recession.

One standard perception was that the Taylor Swift Eras Tour — which was talked about by the Federal Reserve Bank of Philadelphia’s Beige Book in its evaluation of the town’s abruptly sturdy resort income — was saving the U.S. economic system by growing demand.

But even when estimates within the $5 billion vary on the full financial influence of the Taylor Swift tour become correct, the U.S. economic system is just too expansive to present it all of the credit score.

“There’s no denying that the Eras Tour is a cultural phenomenon, but the impact of the tour is not the sole reason the United States has avoided a recession thus far,” wrote Recruitonomics on Aug. 10, 2023. “Instead, the high demand for and impressive spending around her tour contributes to the larger trend of massive consumer spending that has kept the U.S. afloat.”

Ellevest CEO Sallie Krawcheck views a bigger development

While Swift might not get all of the credit score for the present surprisingly sturdy state of the U.S. economic system, Ellevest Founder and CEO Sallie Krawcheck sees a bigger dynamic in play.

In an interview on the New York Stock Exchange on Jan. 30, Krawcheck defined her perspective with TheStreet Editor-in-Chief Sara Silverstein.

“Why didn’t we go into a recession in 2023?” Silverstein requested.

“The answer is women. It’s women,” Krawcheck mentioned. “Women stepping into their financial and economic power and having fun.”

“Going to see Barbie at the movie theater, seeing Beyonce, seeing Taylor Swift, and in doing so, spending money and unleashing economic power,” she continued. “That means going out for drinks before going to see Taylor Swift, staying in a hotel. All of it helps spur the economy and keep us out of recession.”

Krawcheck talked concerning the alternative for girls to train their spending freedom in these methods as a part of a extra essential actuality.

“The other great thing that happened last year and into this year is women are having fun with money after so many decades upon decades of, ‘Oh, I feel so ashamed about money,’ and, ‘Oh my gosh, I bought the latte,’” she mentioned.

Ellevest Founder and CEO Sallie Krawcheck talks to TheStreet on the New York Stock Exchange concerning the function girls performed in serving to the U.S. economic system keep away from a recession in 2023.


Krawcheck talks about girls and monetary energy

The Ellevest founder mentioned some context round these realities associated to pressures girls have historically felt.

“You know, the pundits are telling me I’m not going to be able to afford my retirement because I had the frigging latte this morning, after so long of that shame around money and the money being a hidden thing and a shameful thing,” Krawcheck mentioned. “Women are having fun with it.”

“And the girl math, whether you agree with the math or not, is fun,” she added. “The loud budgeting, talking about money and talking about budgeting is fun. All of this is starting to come out from under the curtains or wherever they were swept, and women are really feeling their economic and financial power.”

Ellevest, based in 2014, describes itself as an investing platform made for girls, by girls. 

Before Ellevest, Krawcheck’s Wall Street profession included roles comparable to chief monetary officer of Citigroup  (C)  and chief of its Wealth Management Division.

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