Executive Summary:
Over the past three and a half years, the US economy has defied the recession expectations of many, remaining uncommonly resilient in the face of stress tests including Fed tightening, an oil price spike, and most recently Trump’s Tariff Turmoil. The economy’s strength despite these formidable challenges supports our base-case Roaring 2020s scenario (to which we assign 75% odds) and our still bullish S&P 500 targets. … A big reason for the economy’s impressive resilience is that the labor market has remained impressively resilient. Americans are working, secure in their prospects to keep working, so their spending hasn’t been slowed by tariff-related uncertainties. … Check out the accompanying chart collection.
US Economy I: Acing Another Stress Test.
Trump’s Tariff Turmoil (TTT) certainly caused lots of uncertainty for workers and their employers, particularly during April and May. It was widely expected that consumers might cut back their spending because of the uncertainty, especially if businesses responded to Trump’s tariffs by reducing their payrolls. So far, the evidence shows that consumers are still spending, and businesses are still expanding their payrolls.
The most widely anticipated recession of all times remains a no-show. It didn’t
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