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 descend into recession.
Experts believed that, for one, the rate of interest will increase carried out by the Federal Reserve in 2022 in its efforts to gradual inflation would inevitably drag the economic system down.
Related: Delta, United and American Airlines have a pricing trick few know
“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 printed 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 throughout 2023. And there are a variety of theories as to why these gloomy predictions turned out to be mistaken.
Most outstanding of these is that the job market unexpectedly remained largely robust 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 would possibly even start reducing them once more in 2024. The inventory market rallied to report highs.
There have been different extensively reported opinions about what stored the economic system out of recession.
One fashionable 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 instantly robust lodge income — was saving the U.S. economic system by growing demand.
But even when estimates within the $5 billion vary on the overall financial affect of the Taylor Swift tour develop into correct, the U.S. economic system is just too expansive to provide 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 pattern
While Swift could not get all of the credit score for the present surprisingly robust 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 viewpoint 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.
Getty Images
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 equivalent to chief monetary officer of Citigroup (C) and chief of its Wealth Management Division.
Related: Veteran fund supervisor picks favourite shares for 2024
Source: www.thestreet.com”