In Dec 2022 a Wall Street Journal survey found economists thought there was a 63% chance of a recession.  Furthermore a survey of economists and investors by the Federal Reserve Bank of Philadelphia showed expectations that GDP would fall in the next three or four quarters.

How’s that working out?

Simply because economists were convinced of their predictions doesn’t mean they were right.  Since the Philly Fed survey started NOT A SINGLE RECESSION was spotted a year in advance.  Economists missed the 1990, 2001 and 2008 recessions completely.

So what happened to that promised recession?

  1. A drop in energy prices helped support demand as Europe secured supplies to replace Russian gas.
  1. The economy and jobs market proved insensitive to interest rates. Companies and consumers are awash in cash due to COVID-era handouts and locked-in low-interest rate loans.
  1. We needed a reminder that the inverted yield curve is an observation – not a cause or a prediction. Are we to believe that the 2019 inversion caused COVID?  The 1973 inversion predicted the Middle East oil embargo?

I often think of Back to the Future Part II where the Biff Tannen from 2015 steals the DeLorean time machine and gives to his younger self the 1955 Grays Sports Almanac.  By knowing the outcome of every major sporting event from 1950 to 2000 future Biff became tremendously wealthy.

We love certainty.  In the absence of it (or refusal to accept that future certainty doesn’t exist) we crave prediction.  The aforementioned economists supplied that need.  Yet time and again we’re reminded (like here and here and here) that predictions are pointless.

In this instance the known is that the future is unknowable.  “Educated” guesses are nonetheless guesses.  Coin flip odds are a poor way to make decisions.