Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they're all tired of it. Everyone would like to make a clean break from 2022 and move on to another story. Unfortunately, it's unclear whether reality plans to cooperate, and there's a growing risk that collective jadedness with recession chatter may cloud our judgment about the real and continuing threat of a downturn.
Understandably so. The word "recession" appeared in more than 650,000 news headlines last year, with peak hysteria in July. At the time, many people speculated that the U.S. was already in a recession. Although it wasn't, we then spent the rest of the year talking about how one was still in the offing; unemployment was poised to rise; home prices were set to fall; and the S&P 500 Index could dip as low as 3,000. It was so much gloom that bearishness became passe. After 12 months of relentless pessimism, none of these forecasts has come to pass, so surely the histrionics are misplaced, some will reason.