By Jeanna Smialek and Ben Casselman
Throughout early 2023, a chorus of economists forecasted a recession that, against all odds, never materialized. Their predictions, rooted in historical data and models, expected the inflation spike and subsequent Federal Reserve interest rate hikes to precipitate a downturn. Instead, the U.S. economy exhibited remarkable resilience, growing by 3.1 percent last year, with inflation receding and unemployment maintaining historic lows. This unexpected turn of events has prompted a reevaluation of economic forecasting, revealing the limitations of traditional models in predicting the complex interplay of global supply chains, consumer behavior, and governmental policy in a post-pandemic world. The experience underscores the need for humility and adaptability in economic analysis, challenging the predictive power of conventional wisdom and highlighting the unforeseen factors that can shape economic outcomes.