Businesses aren't acting as if a recession is coming this year.
And why would they? The Fed isn't acting like it, either. Nor is the latest economic data.
Real gross domestic product in the US grew at an annualized rate of 2.4% in the latest quarter — as Insider's Matt Turner writes, that's just one of several recent statistics that suggest the economy's dream scenario just got even closer.
And so, amid this optimistic backdrop, companies are hiring, small businesses are expanding, and workers are being paid higher wages — as if to say, "What recession?"
But the way businesses act and the way they actually think might be drastically different.
In a survey of business owners from Nationwide, two-thirds of owners said they're expecting a recession in the next six months. Couple that with the latest report from NFIB's Small Business Optimism Index — which found that businesses were anticipating a slowdown in consumer spending — and the economic forecast looks bleak.
They aren't alone in their pessimism. Many Americans feel bad about the economy, despite the positive financial data. Of course, part of that disconnect stems from inflation eating into their budgets, but it may also be because Americans have grown accustomed to wild economic swings following the US's unprecedented recovery from the pandemic. After that dizzying snapback, easing into a new normal could feel rocky.
Still, there are more and more signs that a recession this year is unlikely. We're seeing strong growth and labor-market figures, inflation has been slowing, and a key gauge the Fed closely watches is at its lowest annual rate in almost two years.
But while the broader economy has held up surprisingly well, we are now seeing a downturn of a different kind — a rout in the secondary market for luxury watches. The Fed's aggressive monetary tightening over the past five quarters has spooked investors, causing them to scale back luxury spending, and the most expensive timepieces have suffered the worst declines.
There's been lots of speculation over the future of the US's economic health. But in the luxury market, the Great Rolex Recession is already here.
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