• Last week’s strong January data mean the central scenario from our Global Outlook, Winter 2022, which saw the US economy enter recession in Q1 of this year, now appears unlikely
  • Back in June we described two conditions that would need to be met for the US economy to avoid recession: households would need to eat into their pandemic savings, and inflation expectations would need to fall back to target rapidly, allowing wage increases to moderate
  • Both of these conditions have been met
  • In light of the overwhelming historical precedent, we are not yet ready to rule out a US recession entirely
  • Nevertheless, in our upcoming Global Outlook, Spring 2023, we are likely to push back the point at which the US enters recession, if it does at all, and reduce the weight we attach to those scenarios where it does

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