Let’s start this segment with this quote from Axios:
You might have heard that we’re headed for a recession, or possibly even in one already. If you did, then whoever you heard it from — whether it’s JPMorgan CEO Jamie Dimon or former SEC chair Harvey Pitt or multi-platinum recording artist Cardi B — is moonlighting as an economic forecaster.
Why it matters: Economic forecasts are ubiquitous, useless, and carry a whiff of the ignoble. If you can ignore them, it generally behooves you to do so.
By the numbers: About 55% of Americans currently believe — falsely — that we’re in a recession right now, per YouGov, while only around 22% have the true belief that we aren’t.
U.S. real GDP is on track to grow at a 2.8% pace this quarter and a 2.5% pace next quarter, per FactSet estimates. The latest OECD forecast shows 2.5% growth in the U.S. this year, and positive growth in all of its 25 member states, as well as the eurozone (2.6%) and the world (3.0%).
The Sahm Rule — a test of whether we’re currently in a recession — is in negative territory, implying that we’re nowhere near. (It needs to be above 0.5 to indicate a recession has arrived.)
Because in tech, one might be tempted to think things are pretty bad – TechCrunch with an analysis highlighting that as of the beginning of June, so far in 2022, a Crunchbase news tally shows more than 17,000 workers were laid off.
Of course, to contrast that, Protocol reports that the buzz from RSA last week was more about hiring – security companies are growing.
Why do we care?
I’ve been in that chorus of voices saying I see rough times ahead. Am I buying into the hype? Maybe. Does the data say it? Maybe… and that’s the reason to care. The experience appears to be very targeted.
Take that layoff data – that’s real. Jobs are being lost in portions of tech, linked to the drops in the value of tech companies on the stock market. Let’s not be dismissive of that and instead recognize the targeted nature.
The Axios advice is smart – ignore the predictions where you can. Stay close to your customers, and track the real-time conditions in your market as they hit you. The turbulence I’m predicting is not necessarily widespread… and most importantly, fundamentals are reliable for a reason. Run your business smartly and watch your numbers; things will be fine.